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Summary
Vietnam’s rapid expansion in soybean crushing capacity is reshaping regional edible oil and feed markets. With new large-scale processing units coming online, the country is positioning itself as a competitive source of soybean oil and meal for Asia, including India, while challenging traditional suppliers and even palm oil dominance.
Soybean Oil: Shifting Import Patterns Signal New Supply Sources
Recent data from India’s edible oil imports for November 2025 reveals an interesting trend. India imported nearly 70,000 tonnes of soybean oil from China, following contracts of over 120,000 tonnes during June–July earlier this year.
These purchases underline two clear developments.
First, Indian importers are increasingly price-driven, sourcing soybean oil wherever it is most competitive, regardless of origin.
Second, China has imported more soybeans than it can absorb domestically, allowing surplus oil to flow into neighbouring markets.
Such sourcing flexibility is not new. Industry participants point out that India has previously imported soybean oil from Vietnam, drawing attention to developments unfolding there.
Vietnam: Expanding Soybean Crushing Capacity at Scale
Vietnam’s growing role in the soybean value chain is anchored in major investments by global agribusiness players. US-based Bunge Global SA and Singapore’s Wilmar International Ltd operate a joint venture, Vietnam Agribusiness Ltd (VAL), established more than a decade ago.
VAL has recently commissioned its second soybean crushing unit at the Phu My I Industrial Park. The $100 million facility can crush 4,000 tonnes of soybeans per day. Combined with the first unit inaugurated in 2011, VAL’s total crushing capacity now stands at 7,800 tonnes per day, translating to over 2.5 million tonnes annually.
At full utilisation, the plant is expected to produce around 500,000 tonnes of soybean oil and 2 million tonnes of soymeal each year.
Vietnam’s Feed and Food Demand: A Strong Domestic Base
Soybean oil from VAL will primarily serve Vietnam’s food industry, while soymeal will support the fast-growing animal feed sector. The new capacity is expected to meet nearly 30 per cent of Vietnam’s animal feed demand, which is growing at close to 5 per cent annually.
Vietnam’s edible oil consumption stands at about 1.5 million tonnes, expanding at a modest 0.5 per cent per year. Currently, palm oil from Malaysia and Indonesia dominates this demand, but rising soybean oil availability could gradually diversify the consumption basket.
As part of its broader trade commitments with the US, Vietnam is also expected to import nearly 3 million tonnes of soybeans in the current marketing year, ensuring raw material availability for its expanding crushing sector.
Regional Impact: Competitive Pressure Builds
Industry leaders believe Vietnam’s success could encourage more soybean processing investments in the country. If that happens, the implications will be significant.
Vietnam could emerge as a regional soybean hub for multinational companies, offering storage, processing, and re-export capabilities. Higher crushing volumes will make Vietnamese soybean oil and meal increasingly competitive for nearby markets in South and Southeast Asia.
This poses a potential challenge to palm oil, especially as Indonesia diverts more supplies toward biofuel production, pushing palm oil prices higher. For Indian importers, Vietnam offers an additional cost-competitive sourcing option, reducing dependence on traditional exporters.
Conclusion
Vietnam’s rising soybean crushing capacity marks a quiet but important shift in Asia’s edible oil and feed markets. As processing expands and imports of raw soybeans rise, Vietnam is positioning itself as a competitive supplier of soybean oil and meal. This development not only benefits price-sensitive importers like India but also adds pressure on established soybean exporters such as Argentina and Brazil to remain competitive in an increasingly dynamic market.