Photo: Duc Anh
Latest harvest down 200,000 tons as demand rises 100,000 tons.
The Vietnam Sugar and Sugarcane Association (VSSA) said on June 14 that the 2015-2016 harvest was down by nearly 200,000 tons compared to the previous harvest while demand has increased by 100,000 tons.
“At least 150,000 more tons of sugar are needed between now and year’s end,” Mr. Nguyen Hai General Secretary of the VSSA, told VET.
The domestic sugar price has gone up as a result and there are instances reported of “hoarding” by traders to benefit from rising prices, which have forced the Ministry of Industry and Trade (MoIT) to consider a plan for a pilot auction of import quotas of up to 100,000 tons to ease domestic prices.
“Dry weather and saltwater intrusion are the main reasons for the low harvest,” Mr. Hai said. He also confirmed that the conversion from sugarcane planting to other crops in some localities and the hoarding has caused domestic sugar prices to go up.
In order to stabilize the market and the sugar price, an immediate solution is to promptly introduce a pilot auction on sugar import quotas, according to the Prime Minister’s direction under Document No. 2345/VPCP-KTTH dated April 6, 2016 on the pilot auction of sugar import quotas in 2016 to bridge the shortfall.
Supporting the auction method, Mr. Hai said the solution would quickly provide ample sugar supplies. “The government has agreed on a policy to found an auction council, but there is yet to be any official announcement from the ministry,” he said.
The solution was proposed by authorities based on surveys and inspections of sugar production at certain refineries and on inventories at certain refineries.
Calculations by MoIT on sugar prices and consumption reveal that from the beginning of this year the domestic sugar price has increased constantly. From Tet (in early February) to the end of April the price went up by 10 to 15 per cent compared to the start of the season (in September last year) and 20 to 30 per cent year-on-year.
Wholesale prices in May for white and refined sugar soared. In Hanoi the wholesale price of white sugar was VND16,500-17,000 per kilo and refined sugar VND17,000-18,000. In Ho Chi Minh City the white sugar price was between VND16,400 and VND16,800 and refined sugar VND17,500 and VND18,100.
Since the beginning of June retail prices have increased from VND1,000 to 2,000 per kilo against May, to VND18,000 to VND22,000 per kilo of white sugar.