Proposal to extend the sugar export deadline.
The pressure to clear existing sugar inventories remains a top concern for the entire sugar industry.
Throughout most of the 2012-2013 sugar cane season, most sugar mills struggled with excessively large inventories. To this day, sugar stocks in the mills remain high.
According to Mr. Nguyen Hai, General Secretary of the Vietnam Sugar Association, so far, only the Nuoc Trong Sugar Factory (Tay Ninh) has entered the 2013/2014 sugar cane season. The company's crushed sugar output is still quite low, reaching just over 1,400 tons.
Sugar inventories at factories remain high.
(Photo: Saigon Marketing)
However, the amount of sugar remaining in inventory from the previous crop year across the entire sugar industry is still quite high. As of July 26th, inventory at sugar factories was 389,595 tons (including raw sugar and new crop inventory at Nuoc Trong Sugar Factory), and at trading companies under the Sugar Association it was 16,536 tons.
The release of large sugar stocks from the previous crop year continues to face difficulties, as informal exports to China are slowing down due to heavy rains in recent days, and especially because the Ministry of Industry and Trade has not yet announced an extension of the export deadline, forcing traders to temporarily suspend transporting sugar to border checkpoints. Meanwhile, according to the Ministry of Agriculture and Rural Development, the amount of sugar produced by factories in the new crop year will ensure sufficient and even surplus supply from November 2013.
In the four months of July, August, September, and October, the total amount of sugar consumed domestically was only about 270,000 tons. If consumption in 2013 remains the same as the previous year, the sugar inventory (492,510 tons as of mid-June) will exceed consumer demand by approximately 220,000 tons. If the circulating sugar inventory is maintained at around 100,000 tons, the surplus will be approximately 120,000 tons. This does not include the minimum amount of sugar that must be imported according to WTO commitments.
Therefore, even though many factories won't start their new crushing season until the end of this month, the pressure to sell existing sugar stocks continues to weigh heavily on the sugar industry. This is especially true as smuggled sugar from Thailand continues to flood into Vietnam through the southwestern border and the Vietnam-Laos border, at prices significantly lower than domestic wholesale prices.
At the end of July, the wholesale price of refined white sugar in Hanoi was 15,000-15,200 VND/kg, in Central Vietnam 15,000-15,300 VND/kg, in Ho Chi Minh City 14,500-14,800 VND/kg, and in Can Tho 14,700-15,000 VND/kg. Meanwhile, the price of smuggled sugar in Lao Bao was only 13,700 VND/kg, in Dong Ha 14,500 VND/kg, at the Southwestern border 13,700-13,900 VND/kg, and in Ho Chi Minh City 14,300-14,500 VND/kg.
To alleviate pressure from excess sugar inventory, at the end of July, the Ministry of Agriculture and Rural Development sent a letter to the Ministry of Industry and Trade regarding the consumption of surplus sugar. Accordingly, the Ministry of Agriculture and Rural Development requested the Ministry of Industry and Trade to create favorable conditions for trading enterprises and sugar factories to cooperate in exporting all surplus sugar, helping sugar factories recover capital to prepare for the next production season.
According to (VOV) - LC
