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Sugar prices plunge on smuggling, industry faces crisis

Update: February, 27/2018 - 08:00
Caption: Low demand for Vietnamese sugar due to illegal imports of cheap sugar from countries like Thailand is badly affecting producers and sugarcane farmers. — VNA/VNS Photo Mạnh Linh
Viet Nam News

MEKONG DELTA — Sugar prices in domestic market have fallen so sharply that sugar mills and sugarcane farmers in the Cửu Long (Mekong) Delta are facing difficulties.

In some markets and supermarkets in HCM City, sugar from big local brands now sells at VNĐ20,000-21,000 (US$0.88-0.92) a kilogramme, down VNĐ1,000-1,500 ($0.04-0.07) from the end of last year.

The prices of other brands are lower at VNĐ18,000-18,500 ($0.79-0.81).

According to Nguyễn Văn Hải, general secretary of the Việt Nam Sugarcane and Sugar Association (VSSA), sugar prices are low because domestic supply and demand are well matched but a lot of cheap sugar is smuggled into the country.

Vietnamese producers cannot compete with imports.

For instance, the price of sugarcane in Thailand is only about $30 per tonne while in Việt Nam it is around $50, and sugarcane accounts for 75-80 per cent of sugar costs.

According to the VSSA, at the end of last year world sugar prices fell by 25 per cent compared to the beginning of the year.

In a report last month Green Pool Commodity Specialists of Australia said global sugar output last month topped 10.43 million tonnes, leading to a 48.4 per cent increase in inventories, the highest rate in 15 years, putting downward pressure on prices.

All this directly affects sugarcane farmers.

The delta is the country’s largest sugarcane farming area with a total area of ​​50,000ha under the crop.

Hậu Giang Province has the largest area under ​​sugarcane, nearly 11,000ha, and is the main supplier for two sugar mills, Cồn Long Mỹ Phát Sugar and Sugarcane Company and Cần Thơ Sugar Joint Stock Company (Casuco).

Last month the sugar inventories at companies around the country were estimated about 239,000 tonnes. — VNS

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