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Local food processors suffer sugar shortage

Update: July, 16/2012 - 10:03

by Vu Hoa

HA NOI — Food processing businesses have said that a shortage of sugar was to blame for production problems, but sugar refineries have refuted the claims, causing market controversy.

Several producers of beverages, confectionery, milk and foodstuffs have complained to ministries and relevant agencies that they were not able to buy domestically-produced sugar, especially refined sugar.

Bui Thi Huong, director of the Viet Nam Dairy Product Company (Vinamilk) Public Relations office said the company's sugar demand this year was more than 113,000 tonnes, and it had asked the Ministry of Industry and Trade (MoIT) to import 75,000 tonnes of sugar since 2011.

Huong said Vinamilk bought 57,000 tonnes of domestic sugar this year at a cost of more than 35 per cent higher than the global price.

She said they had asked the ministry to grant a quota for sugar imports this year, but had not received a reply.

She added that sugar supply companies were not dedicated to their work, and the quality did not meet Vinamilk's standards.

"We bought domesticly produced sugar for VND17,000 per kilo, but imported produce that only cost a total of VND14,000," she said.

Viet Nam Sugar and Sugarcane Association's general secretary Ha Huu Phai said that under a World Trade Organisation commitment, Viet Nam was required to open its sugar market by allowing imports every year. In 2005, we imported 25,000 tonnes, 2010 reached 70,000 tonnes, and the maximum this year would also be 70,000 tonnes.

"However, imported sugar should depend on domestic supply. This year, Viet Nam has had a bumper sugar crop that could be enough for producers, even for the upcoming mid-autumn festival and Tet (Lunar New Year) Holiday," he said.

He said that producers had asked the MoIT to provide an import quota, as global prices continued to remain lower than domestic costs.

"In addition, producers say the quality of domestic sugar does not meet their requirements, forcing them to look for alternatives," he said.

The general secretary added that if producers signed contracts with sugar refineries to produce a product that met their requirements, the refineries would be ready.

Sharing the idea, Do Thanh Liem, general director of Khanh Hoa Sugar Joint Stock Company, said producers wanted to import sugar because it was cheaper.

Liem said sugar prices, even in the Philippines and Thailand, were higher than the rest of the world.

"There is a paradox in Viet Nam because producers are importing at a low cost, but trying to sell it for a premium," he said.

He said it would be unfair if the ministry granted import quotas for some producers because the country had thousands of businesses involved in the sector.

Several companies did not value domestic sugar quality, he said, adding that his company was one of the few domestic refineries that could meet producers' requirements.

The director suggested that the ministry should take responsibity for importing sugar, then invite bids that would benefit the State budget.

Responding to the issue, deputy director of the ministry's Domestic Market Department Nguyen Xuan Chien said they had not received information from the Ministry of Agriculture and Rural Development and the VSSA on a corner in the market.

Chien said the ministry would look at the information when it was available and try to resolve the issue, ensuring the interests of all parties while protecting domestic production. — VNS

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