Hanoi (VNA) – The cooking oil market in Vietnam has become morecompetitive than ever, with many firms jumping into the industry.

Fierce competition among domestic brands

A domestic cooking oil giant  - the Kinh Do Corporation (KIDO) reported a fall in its cooking oil revenue in the second quarter dueto considerable competition, with the corporation’s earnings falling by morethan 20 percent to 1.67 trillion VND (72.2 million USD).

Among KIDO’s three membercompanies operating in cooking oil, which are Tuong An Vegetable Oil Company(TAC), Vietnam Vegetable Oils Industry Corporation(Vocarimex) and Golden Hope Nha Be Edible Oils Co.,Ltd, only Golden Hope Nha Behad profitable business during April-June.

TAC gained 869billion VND in the period, a year-on-year decrease of 14 percent, whileVocarimex experienced a drop of 35.21 percent to 694 billion VND.

Despite formidable challenges, KIDO still saw cooking oil as an attractive sectorthanks to the large market and potential purchasing power.

Sao Mai Group, which focuses on property trading and seafood processing, has alsoentered the cooking oil market with its Ranee premium fish oil in 2014. Thefirm said although the market is competitive, it is still firm on the decisionas there are no domestic or foreign producers making cooking oil from tra fish.

Meanwhile, logistics services provider Daso Group launched two new vegetableoil brands of Ogold and Binh An, and Quang Minh Vegetable Oil Joint StockCompany produces cooking oil with its Mr Bean, Soon Soon and Oilla brands.

Cooking oil consumption in Vietnam is estimated at 9.5 kilogrammes per head perannum, lower than the level recommended by the World Health Organisation (WHO)of 13.5 kilogrammes. Therefore, the business community sees opportunities inthe Vietnamese cooking oil market.

Relying much on import

Accordingto Malaysia’s Primary Industries Minister Teresa Kok, who led a Malaysianbusiness delegation to a palm oil trade fair in Ho Chi Minh City recently, Vietnameseproducers can meets only 40 percent of the total demand for cooking oil that isabout 1.5 million tonnes each year, which means the country has to import thelion’s share from other countries, including Malaysia.

In the first half of the year, Vietnam purchased 242,700 tonnes of cooking oilfrom Malaysia, or 23,200 tonnes more than the same time in 2018.

Teresa Kok suggested Vietnamese and Malaysian investors work together to expandbusiness cooperation in cooking and palm oil. Relishing bright prospects in theVietnamese market, many Malaysian firms are planning to invest or expand in theSoutheast Asian country.

Consumers benefit from competition

Statistics from the Ministry of Industry and Trade show there are some 40 firmsengaging in producing and trading cooking oil in Vietnam, of which palm oilmakes up 70 percent and soil bean oil accounts for 23 percent.

More businesses joining in the local cooking oil market means consumers havemore options to buy high-quality products at rational costs.

As for suppliers, they should improve production to sharpen their competitiveedge./.