Businesses make good profits, sugarcane growers become poorer

The Vietnam Sugarcane and Sugar Association (VSSA) said that finished sugar inventories will continue to be high in the 2013-2014 crushing season, which begins in mid-September 2013.

Meanwhile, the results of the 2012-2013 sugarcane pressing season created two different trends between businesses and sugarcane farmers, which were that businesses made good profits, while farmers' profits decreased.

Businesses make good profits, farmers suffer

At the conference “Summary of the 2012-2013 sugarcane production season” held in Hau Giang today (July 25), Mr. Doan Xuan Hoa, Deputy Director of the Department of Processing and Trade of Agricultural, Forestry and Fishery Products and Salt Industry, said that in the 2012-2013 pressing season, 40 sugar factories nationwide (with a total design capacity of 134,200 tons/raw sugarcane/day) pressed 16.6 million tons of raw sugarcane, producing about 1.53 million tons of finished sugar.

“Compared to the previous pressing season, the capacity increased by 4,300 tons of raw sugarcane per day (equivalent to 3.3%); the amount of raw sugarcane used for pressing increased by 2.1 million tons (14.5%), and the finished sugar produced increased by 224,000 tons (17.1%),” he said.

According to the report of the Ministry of Agriculture and Rural Development, in the 2011-2012 sugarcane growing season, the whole country planted 298,200 hectares, an increase of 15,000 hectares compared to the previous season; productivity increased by 2.2 tons/hectare, output increased by 1.5 million tons (reaching 19.4 million tons).

“Regarding the consumption situation, in the 2012-2013 pressing season (from August 15, 2012 to July 15, 2013), the total amount of sugar sold by businesses reached nearly 1.27 million tons (of which about 200,000 tons were exported to China), an increase of 58,000 tons compared to the previous season,” said Mr. Hoa.

However, the profits of sugarcane farmers tend to decrease, the cause of which is determined to be the decrease in selling prices. Specifically, the price of raw sugarcane sold by farmers is generally only 750 - 850 VND/kg (field price), while in the previous crop, it was sold for 900 - 1,000 VND/kg, and at times even reached 1,050 - 1,100 VND/kg.

On the contrary, sugar production enterprises still achieved quite good profits. Accordingly, in the first quarter of 2013, Ninh Hoa Sugar Joint Stock Company (Khanh Hoa) had a profit after tax of 22 billion VND, an increase of about 10 billion VND compared to the same period last year; Gia Lai Sugarcane Thermal Power Joint Stock Company - SEC (Gia Lai) had a profit after tax of more than 32 billion VND, an increase of 5 billion VND compared to the same period last year.

Many sugar companies are quite profitable, as shown by the budget payment of sugar factories for the whole crop year of more than 1,000 billion VND.

Inventories remain high

Forecasting the 2013-2014 sugarcane crushing season, which will begin in mid-September, VSSA said that sugar inventories will continue to be high. According to VSSA, there are three main reasons for the high sugar inventory pressure: first, sugar inventories from the 2012-2013 crushing season are carried over; second, finished sugar produced in the 2013-2014 crushing season are large; third, the pressure of smuggled sugar into Vietnam is high.

“If the amount of sugar transferred annually remains the same, about 100,000 tons, and the 2013-2014 pressing season produces 1.6 million tons (the expected production number of the 2013-2014 pressing season), 78,000 tons of imported sugar according to the World Trade Organization (WTO) commitment, and at the same time, domestic consumption is restored, about 1.5 million tons, then the amount of sugar in stock is forecast to be about 200,000 tons,” said Mr. Hoa. That is not counting the case of smuggled sugar flooding into Vietnam more and more.

According to baocongthuong.PH