The whole country has nearly 555,000 tons of sugar in stock.

Among current agricultural crops, sugarcane is still the crop with the closest connection between producers and processing enterprises through investment contracts and product consumption.

However, the production and business process still has many barriers that have not been removed...

Area reduced by more than 16,000 hectares

According to statistics from the Ministry of Agriculture and Rural Development, in the 2016-2017 crop year, the sugarcane area nationwide only reached 268,300 hectares, a decrease of 16,067 hectares compared to the previous crop. Of which, the area in the concentrated raw material areas of 25 provinces with sugar factories was 257,600 hectares, a decrease of 15,205 hectares. For the areas with contracts and product consumption, only reached 218,343 hectares, accounting for 80% of the total area nationwide and a sharp decrease compared to the plan at the beginning of the crop.

Through survey and evaluation, the Central Highlands is the region with the most stable area and productivity (area 56,700ha, increased by 371ha; average productivity 62.6 tons/ha); meanwhile, the South Central Coast region with unfavorable natural conditions, poor cultivated land, often facing drought, so productivity and quality give the lowest results.

Mr. Vo Thanh Do, Deputy Director of the Department of Processing and Market Development of Agricultural Products, commented: “Localities and factories have applied many policies to encourage the development of the sugar cane industry, most of the areas have signed investment contracts to consume products with a guaranteed floor price right from the beginning of the season. However, the efficiency of sugar cane is not high, leading to a trend of reducing the area.”

In fact, in the 2016-2017 crop year, some localities did not comply with the planning, factories lacked investment in cooperation with farmers, and unhealthy competition in raw material areas still occurred; sugar production costs remained high due to high raw sugarcane prices; the process of investing in improving the capacity and production level of factories was not in-depth, and many businesses expanded their capacity disproportionately to the supply capacity of raw material areas...

In addition, the implementation of the National Standards on the quality of raw sugarcane is not close, many places still actually buy in bulk, thus not encouraging sugarcane growers to invest. Another problem is that the process of determining sugar content has not received consensus and trust from farmers.

Obviously, the sugar industry nationwide is facing many barriers.

Sugar inventory is too high

As of August 15, 2017, sugar inventory at factories nationwide was 554,456 tons, more than 350,000 tons higher than the same period last year.

The large amount of sugar in stock is one of the reasons for the gradual decrease in purchasing prices later on. Specifically, at the beginning of the season, the price of white sugar type I (including VAT) fluctuates from 16,500 - 17,000 VND/kg, in the middle of the season 15,500 - 17,000 VND/kg, and at the end of the season 15,000 - 16,000 VND/kg.

Regarding this issue, experts emphasized two aspects: First, the large amount of commercial sugar inventory from the end of the 2015-2016 crop; second, the situation of smuggled sugar is still difficult to control (the price of smuggled sugar from Thailand at border gates and the domestic market is always 1,000 - 2,000 VND/kg lower than domestic RE sugar, peaking from April 2017 at 2,000 - 2,500 VND/kg lower).

According to the statistics of sugar factories nationwide, in the upcoming 2017-2018 crop, the total area with investment contracts and product consumption is 248,930 hectares, an increase of 30,587 hectares. The expected design capacity is 159,200 TMN, the sugarcane pressing output is 15.17 million tons, the sugar output is 1.42 million tons, of which refined sugar is 600,000 tons.

However, according to the assessment of the Department of Agricultural Product Processing and Market Development, the above plan may be at the “expectation” level. Given the current situation of increasingly narrowing sugarcane growing areas, if businesses do not have careful investment, it will be difficult to achieve the set goals.

According to Vietnam Agriculture Newspaper