Many mixed opinions

The Vietnam Sugarcane and Sugar Association (VSSA) has just sent a document to the Prime Minister requesting that the import of sugar produced by Hoang Anh Gia Lai Joint Stock Company in Laos and the unofficial export to China of sugar not from sugarcane produced by Vietnamese people be prohibited.

Domestic roads worry about losing market share

Information from the Ministry of Industry and Trade said that the Lao Deputy Prime Minister sent a letter to Deputy Prime Minister Nguyen Xuan Phuc requesting the Vietnamese Government to direct relevant ministries and branches to consider and resolve the import quota of 40,000 tons of sugar produced by Hoang Anh Gia Lai (HAGL) in Attapeu province (Laos) to Vietnam in the 2013-2014 crop year and will increase it annually. At the same time, HAGL also requested the Ministry of Industry and Trade to approve the company to sell 30,000 tons of raw sugar produced by Hoang Anh Attapeu Sugarcane Company Limited in Laos to Bien Hoa Sugar Joint Stock Company through the secondary border gate in the 2013-2014 crop year.

In response to these comments, the Ministry of Industry and Trade has sent an official dispatch requesting the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, the Ministry of Finance and the Ministry of Foreign Affairs to provide their opinions to submit to Deputy Prime Minister Nguyen Xuan Phuc on whether or not to allow HAGL to import sugar.

However, according to VSSA, if Bien Hoa Sugar Joint Stock Company is allowed to import raw sugar for production, it must import and export through official channels, with strict supervision by customs. If domestic consumption is within the annual import quota committed to the WTO in the form of import bidding, the price difference must be collected for the budget.

VSSA analyzed that the domestic sugar surplus is 400,000 tons in the 2012-2013 crop year and forecasts that in the 2013-2014 crop year, the surplus will reach 600,000 tons. Meanwhile, currently, the Ban Vuoc border gate (Lao Cai) is the only "exit" for Vietnamese sugar to China. If HAGL is accepted to support, it will inadvertently allow foreign sugar to take over the export market share to China through the above unofficial route.

According to VSSA: Although supporting Hoang Anh Gia Lai is beneficial for the company, Bien Hoa Sugar and the Vietnam - Laos relationship, it causes damage to 40 domestic sugar factories with tens of thousands of workers and millions of domestic sugarcane farmers. Therefore, this trade-off is disproportionate.

Not causing difficulties for the domestic sugar industry?

In addition to the concern of losing market share in informal imports, domestic sugar cane producers are also worried about having to compete on price with sugar produced by HAGL in Laos. This product is sold at a very cheap price due to the low price of sugar cane (296 VND/kg of sugar cane). Meanwhile, sugar factories in Vietnam buy sugar cane at 9,000-11,000 VND/kg, making domestically produced sugar unable to compete on price with HAGL's sugar.

Mr. Nguyen Van Loc - General Director of Bien Hoa Sugar Joint Stock Company - said: Initially, HAGL wanted to bring sugar produced in Laos to Vietnam for consumption. But this would cause difficulties for businesses that have been granted import quotas of 73,500 tons of sugar according to WTO commitments and cause difficulties for the domestic sugar industry. Because the investment attraction policy of the Lao Government has many special incentives for HAGL's sugar project, thanks to which the sugar produced by the company in Laos has a particularly low price (only 4,320 VND/kg).

The solution of importing raw sugar from Laos, processing it, and exporting it to China will both solve the problem of sugar consumption for HAGL and have the least impact on our country's sugar industry. Because the Chinese market is capable of absorbing hundreds of thousands of tons of Vietnamese sugar each year. Therefore, exporting a few tens of thousands of tons of sugar originating from raw sugar imported from Laos will not affect our country's sugar exports through unofficial channels.

According to baocongthuong