Vietnam’s economic status and development
Vietnam (Population: 83.1 million persons) has been one of the world’s fastest growing economies over the past 5 years (see Table below). In recent years, this growth has been driven by a combination of exports and, importantly, domestic demand.
Vietnam Economic Performance – 2001 to 2005
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2001
|
2002
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2003
|
2004
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2005
|
2006 P
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| |
|
|
|
|
|
6.9%
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7.1%
|
7.3%
|
7.8%
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8.4%
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8.2%
|
| |
|
|
|
|
|
P: Provisional figure.
Source: Asian Development Bank and Government of Vietnam
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This economic growth has seen Vietnam’s middle and upper income group develop from near zero-base 10 years ago to between 4 and 5 million persons today. Most of these persons live in Ho Chi Minh City or Hanoi.
The lower income group markets have also expanded dramatically because, as in China, persistent rapid economic growth has brought about a rapid decline in the number of persons living on or below the poverty line. The lower income groups are important because they have demand for Vietnam-made food products and drinks that contain imported food ingredients.
The population is expected to grow to about 89 million people by 2010 (1.4% annual growth). Vietnam has a very young population profile with 41% aged 19 years or younger. These young persons represent a sizeable future consumer base if they can escape poverty.
Recent forecasts indicate that future economic growth of between 6% and 8% per annum could see the middle and upper income group double in size before 2015.
These market changes have not gone unnoticed by foreign investors or some larger exporters. A number of large EU headquartered companies have identified Vietnam as a key market for development over the next 10 years. These companies include Nestlé, Unilever, Carlsberg, Friesland Foods and Campina, all of which have invested in some form of production operation in Vietnam.
In addition to this, Numico has identified Vietnam as one of the world’s “high potential” markets for development over the next 5 years. Another multinational company believes that Vietnam will become a larger market than the Philippines within 5 years.
Recent trends in imports of food and drinks to Vietnam
The positive economic growth, and a level of food market access liberalisation, over the past 10 years has underpinned a major boost in demand for imported food, drinks, food and feed ingredients. Imports of such products increased to US$ 1,598 million in 2005, up from US$ 402 million in 1997.
The Table below provides an overview of trends in Vietnam’s imports of food, drinks and food ingredients over the period from 2000 to 2004.
Vietnam food, drinks and agrifood imports - 2000 to 2004
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| |
2000
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2001
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2002
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2003
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2004
|
| |
US$ ‘000
|
US$ ‘000
|
US$ ‘000
|
US$ ‘000
|
US$ ‘000
|
|
Meat and poultry
|
1,613
|
2,892
|
11,623
|
5,378
|
38,069
|
|
Fish and seafood
|
18,914
|
27,599
|
57,174
|
87,359
|
116,153
|
|
Dairy products, etc.
|
129,304
|
221,668
|
98,467
|
132,330
|
155,834
|
|
Vegetables
|
8,728
|
11,151
|
29,921
|
40,642
|
38,958
|
|
Fruits
|
100,303
|
50,061
|
54,661
|
84,382
|
96,205
|
|
Coffee, tea, spices
|
4,266
|
12,534
|
11,311
|
20,627
|
16,169
|
|
Cereals unprocessed
|
43,746
|
78,710
|
86,025
|
120,557
|
110,857
|
|
Milling industry products
|
57,108
|
57,848
|
60,529
|
79,910
|
78,581
|
|
Oilseeds, etc.
|
23,341
|
24,144
|
35,989
|
67,250
|
54,410
|
|
Fats and oils
|
78,451
|
89,150
|
84,930
|
102,840
|
140,410
|
|
Processed fish and meat
|
3,622
|
3,117
|
14,012
|
25,394
|
12,356
|
|
Sugar and its products
|
11,119
|
60,641
|
19,312
|
30,099
|
27,387
|
|
Cocoa and its products
|
3,092
|
4,364
|
4,704
|
6,716
|
8,220
|
|
Cereal/starch based preparations
|
27,776
|
27,663
|
26,992
|
49,626
|
70,906
|
|
Fruit and vegetable based preparations
|
5,010
|
4,968
|
5,836
|
8,585
|
8,921
|
|
Miscellaneous food preparations
|
32,766
|
48,140
|
49,883
|
71,527
|
86,505
|
|
Drinks, non-alcoholic and alcoholic
|
57,109
|
53,797
|
69,717
|
77,757
|
88,070
|
| |
|
|
|
|
|
|
Total in US$ ‘000
|
606,268
|
778,447
|
721,086
|
1,010,979
|
1,148,011
|
| |
|
|
|
|
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% change
|
-
|
+ 28.4 %
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( 7.4 %)
|
+ 40.2 %
|
+ 13.6 %
|
| |
|
|
|
|
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Source: Exporting country statistics (FOB pricing)
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Most segments in the Vietnamese market saw consistent growth in imports over the period from 2000 to 2004. A review of the data for 2005 indicates that there was significant growth in imports in that year.
© Stanton,Emms & Sia (2006 to 2011)
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