Weak demand for domestic sugar and the penetration of smuggled sugar have been dragging down sugar prices in Vietnam, driving many producers into unprofitability.
A farmer takes care of his sugarcane farm. Domestic sugar producers must narrow their sugarcane farms to adapt to falling prices (Photo: VNA)
Hanoi (VNS/VNA)- Weak demand for domestic sugar and the penetration of smuggled sugar havebeen dragging down sugar prices in Vietnam, driving many producers intounprofitability.
According to the VietnamSugarcane and Sugar Association, refined sugar has dropped to around 18,000 VNDper kilo and unrefined sugar to 17,200 VND per kilo since early this year.
The prices are so lowthat sugar producers find it impossible to cover their production costs. Manyhave no choice but to cease operation to cut losses.
Meanwhile, smuggledsugar continued to move into the country via southern borders in June andearly July, flooding the market. Smuggled refined sugar sold at just around 16,400VND, low enough to price out domestic sugar.
Imported sugarfuels the situation by adding to the abundant supply of cheap sugar.Domestic sugar held on to around 20% of the market share.
The Trade RemediesAuthority under the Ministry of Industry and Trade has recently submitted aninvestigation report to the Politburo.
The report said severalfirms in the ASEAN region had committed origin fraud when they exportedsugar to Vietnam.
There has beena steep rise in imported sugar from Cambodia, Indonesia, Laos, Malaysia andMyanmar since Vietnam imposed provisional anti-dumping and anti-subsidymeasures on Thai sugar.
In Cambodia, Phnom PenhSugar Ltd. is an exporter that has circumvented the trade remediesapplied to Thai sugar. In Indonesia, fraudsters include Kebun Tebu Mas andSentra Usahatama Jaya.
Meanwhile, due to thetrade measures, Thai sugar has begun to plummet by 72% since March 2021.
The report also saidthat some other countries, which have never been sugar producers nor sugarproducers with large output, saw their sugar exports to Vietnam suspiciouslysoaring.
In contrast, domesticsugar has been on the line amid weak demand and an abundant supply of foreignsugar. Domestic firms have to cut back on sugarcane farms to run at lowcapacity./.
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A farmer takes care of his sugarcane farm. Domestic sugar producers must narrow their sugarcane farms to adapt to falling prices (Photo: VNA) 
