Prices stir sugar industry
by Thu Ngan
HCM CITY (VNS)— Low quality and high and volatile prices are causing problems for the sugar industry, a conference heard in HCM City yesterday.
Trinh Minh Chau, deputy chairman of the Viet Nam Sugar and Sugarcane Association, said many of the large sugar consumers – like confectionery and beverage makers – want to import sugar though domestic firms have large stocks.
"The sugar industry has an inventory level of 200,000 tonnes," he said. Output in 2011-12 was 1.3 million tonnes.
Vu Quoc Tuan, corporate affairs manager at Nestle Viet Nam, said his company is forced to import because of price and quality.
The price of Vietnamese sugar is often 15-30 per cent higher than that of imports, he said.
"Not all domestic manufacturers can supply sugar that meet our quality requirement."
He and other representatives from large sugar-consuming companies urged Vietnamese producers to raise their quality.
"The standard of Vietnamese sugar must be the same as international standards or we will be left behind," they warned.
Agreeing with delegates, the association said high prices were the biggest shortcoming of the sugar industry. To resolve the problems, the industry would undertake programmes to improve the sugarcane yields and quality and sugar-processing technologies.
Chau said: "Co-operation among manufacturers and users will be strengthened to ensure stable development and benefit."
Truong Phu Chien, general director of confectionery firm Bibica Corporation, complained that sugar prices changed frequently.
"The prices vary during different stages of a crop. Sometimes, it varies by 50 per cent between the start of a crop and harvest. This strongly affects our production.
"But the price of imported sugar is stable, we can import at the same price [at any time]."
He called for limiting the price change during the life a particular crop to around 5 per cent.
This was endorsed by many other participants. Most agreed that sugar prices are not stable and always higher than international prices.
Chau took a dig at some major users, saying they always ask for import quotas but do not use them up.
"[Two years ago] the quota was 300,000 tonnes but companies imported only 252,000 tonnes.
"[Last year] the figures were 250,000 tonnes and 207,000 tonnes respectively. In April these companies asked to import 388,000 tonnes of sugar while domestic firms have a large inventory."
Chien concurred saying that sugar manufacturers and users fail to co-ordinate properly.
The industry hopes to produce 1.5 million tonnes of sugar from the 2012-13 sugarcane crop.
By 2020 it plans to increase output to 2 million tonnes to meet not only domestic demand but also export. — VNS