The sugar industry needs to unite for sustainable development.

According to information from the Vietnam Sugarcane and Sugar Association (VSSA), in 2013, the country's domestic sugar production alone will have a surplus of about 200,000 tons, not including the annual import quota according to the commitment when Vietnam joined the WTO and a large amount of smuggled sugar across the borders with Cambodia and Laos.

Mr. Nguyen Minh Chau, Vice President of VSSA, said that in the 2012-2013 crop year, 40 sugar factories nationwide are expected to produce approximately 1.6 million tons of sugar of all kinds while domestic demand is only about 1.4 million tons. However, food, confectionery, and beverage manufacturing enterprises - units with high demand for sugar - still complain about not being able to buy sugar at times.



Faced with the above situation, VSSA has invited major food producers and sugar consumers nationwide to discuss cooperation directions and solve output problems for the Vietnamese sugar industry in 2013.

Mr. Nguyen Thanh Long, Chairman of VSSA, suggested that sugar consuming enterprises in 2012 limit sugar imports, prioritize domestic products, not use smuggled sugar, not ask for import tax reduction, and sign bilateral consumption and supply contracts.

The sugar industry in our country is facing numerous difficulties as domestic sugar prices are falling and smuggled Thai sugar is manipulating the market. Raw sugarcane prices in the Mekong Delta are continuously falling and are difficult to sell, causing a series of sugarcane growers to feel like they are sitting on fire. Currently, sugar factories and farmers are all suffering losses, while the 2012-2013 sugarcane production season is still very long.

According to Mr. Long, this year's sugar crop is many times more difficult than last year's, because the sugar industry is facing disadvantages both domestically and internationally. Specifically, the domestic price of granulated sugar has continuously decreased to only 15,000 - 15,200 VND/kg, down 3,000 - 3,500 VND/kg compared to the same period last year. With this price, after deducting costs, sugar factories lose 500 - 800 VND/kg.

Despite the price drop, sugar processing factories still have difficulty selling their sugar. For example, Phung Hiep and Vi Thanh factories have produced over 12,000 tons of sugar since the beginning of the season, but have only sold 30% of their output (a loss of over 10 billion VND); the remaining 70% must be stored in warehouses, incurring additional costs. Domestic sugar is being affected by smuggled sugar from Thailand, causing sugar prices to fall and making it difficult to sell.

According to statistics from the authorities, smuggled sugar floods into our country every year, selling at prices 500 VND/kg or more lower than domestic sugar (depending on the time), so they manipulate the market. Let's imagine, domestic sugar factories have to invest in raw material areas, production must pay taxes... while smuggled sugar traders evade taxes so they sell at low prices. Therefore, domestic sugar cannot compete.

World sugar prices also dropped sharply from over 700 USD/ton to 413 - 455 USD/ton. As world and domestic sugar prices both fell, raw sugarcane prices in the Mekong Delta were forced to fall as well.

Meanwhile, sugar consuming businesses also said they support the policy of using domestically produced sugar. However, the most difficult thing is that domestic sugar prices fluctuate too much, sometimes up to 50%, disrupting businesses' business plans.

Many opinions say that the sugar industry needs to re-plan in a reasonable way in terms of seasons, increase the scale of production, and apply mechanization. Factories should invest in modern equipment, reduce the number of workers, and move towards automating many stages to reduce costs and increase quality. State management agencies also need to have mechanisms and policies to support the sugar industry in terms of capital, especially preventing smuggled sugar. Only then can the sugar industry develop stably and sustainably.

According to Kinhtenongthon.com.vn - HV