People worry when sugar industry integrates

(Baonghean) - In a few weeks, sugarcane growers in Nghe An will begin harvesting the 2017-2018 crop. It will be extremely difficult as the ASEAN integration roadmap in early 2018 is very close.

According to the roadmap after 2018, the import tax on sugarcane from ASEAN countries will be 0% instead of 30% as at present. That poses many challenges for the Vietnamese sugar industry, specifically sugar factories and sugarcane growers in the localities. What is more worrying is that even before that time comes, domestic sugar prices have been continuously "struggling".

Sugar price drop worries people and factories

There were times in 2017 when the price of sugar traded in Vietnam “bottomed out” at around 12,000 VND/kg and in early November it increased slightly but not significantly. However, if we look at the world sugar price, it is really worrying when trading in Vietnamese Dong, at the beginning of November 2017 it was only around 7,500,000 VND/ton, or around 7,500 VND/kg.

Right from the beginning of the sugarcane season, sugarcane companies have sent technical staff to guide farmers on sugarcane planting and care techniques to bring high efficiency. Photo: Thai Hien

Through analyzing the situation, the Vietnam Sugarcane and Sugar Association has stated that if a 0% sugar import tax is applied, the domestic sugar industry will be truly threatened, with the possibility that some production enterprises will have difficulty surviving.

Therefore, the Sugarcane Association proposed that the Prime Minister postpone the implementation of the commitment within the ASEAN bloc until 2022, if earlier, to 2020. This has not been decided by the Government, so domestic sugar factories are really worried and this has led to great anxiety among sugarcane growers.

The family of Ms. Dang Thi Nguyet in Hamlet 1, Dinh Son Commune (Anh Son) is one of the first households to convert 5 sao of alluvial land to grow sugarcane. In the 2016-2017 sugarcane crop, her family harvested 30 tons of sugarcane, after deducting expenses, her family had over 25 million VND. However, when hearing the news that sugar prices would decrease in the coming years, the family was very worried, because converting to growing sugarcane is not easy while the investment cost is high.

Ms. Nguyet shared: “Currently, the sugarcane purchase price signed by Song Lam Sugarcane Joint Stock Company at the beginning of the year at 850 VND/kg also brings low profits to farmers, let alone decreasing it further. If the sugar price continues to decrease, we sugarcane growers will hardly avoid heavy losses.”

Sugarcane growers in the key area of ​​Quy Hop district are also concerned and worried. Because if sugar prices go down, factories in the province will buy sugarcane at a low price, which will directly affect income, especially for households that have long depended on sugarcane cultivation.

When talking about this issue, Mr. Truong Van Hong in Tay Loi hamlet, Van Loi commune (Quy Hop) said: “Through the press, I also learned about the issue of sugar prices when integrating the region. For my family, sugarcane has helped my family escape poverty, but when the price drops, when will we be able to get better?!”.

Through the discussion, Mr. Ngo Van Tu - Director of Nghe An Sugarcane Company Limited shared: "We are also waiting for decisions from the Government. Obviously, when sugar prices are low, it will lead to many problems such as raw sugarcane purchasing prices, workers' income and competitiveness in domestic and international markets...".

That is also the "mood" of all sugar factories in the province and the whole country.

In the 2016-2017 crop year, sugarcane yield in Anh Son reached 70 tons/ha. Photo: Thai Hien

Transform to survive

Nghe An currently has a sugarcane area of ​​20,123 hectares. According to the planning of the sugarcane material area of ​​the whole province, it needs to reach 30,600 hectares, serving 3 sugar factories in the area.

Sugar factory leaders affirmed that, for the time being, in the 2017-2018 sugarcane harvest, the purchase price of raw sugarcane in the province has not decreased, but in the coming years, no one dares to guarantee price stability. And if our country applies a 0% import tax policy on sugar, the purchase price of sugarcane will certainly decrease.

Thus, sugarcane growers will be most directly affected. Meanwhile, sugarcane is the main crop of people in many localities and according to surveys by factories, the sugar content (sugar content - CCS) in sugarcane in Nghe An is higher than the national average (the national average is 9.74 CCS, while in Nghe An it is from 10.5 to 11.40 CCS).

Therefore, to maintain and promote the value of sugarcane, there is no other way than for sugarcane growers to change their production methods towards improving productivity and quality of crops. Because according to statistics from the agricultural sector, sugarcane productivity in the province has not yet met the requirements, currently reaching an average of about 54 tons/ha (the plan is 64 tons/ha) and in fact, there are areas reaching over 100 tons/ha.

Mr. Phan Van Hoa - Director of Agriculture, Song Lam Sugar Joint Stock Company said: Currently, the Ministry of Agriculture and Rural Development has required all sugar factories nationwide to buy sugarcane based on sugar content. Therefore, if the quality of sugarcane is improved, sugarcane growers will make a profit.

In this regard, sugar companies have long been accompanying sugarcane growers, sending technical staff to guide planting and care to bring high efficiency. At the same time, they actively seek and apply new, high-yield sugarcane varieties with farmers, and provide fertilizer loans, support improvements in planting, care, harvesting and processing.

With that approach, the factory hopes that people will trust and stick with sugarcane for a long time. That is also the way for sugar companies to survive the difficulties of the integration period.

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