Association proposes stopping temporary import of sugar

Farmers in the northern Tuyen Quang province’s Son Duong District harvest surgarcane. – VNA/VNS Photo Van Ty

This was in opposition to a recent proposal by the Ministry of Industry and Trade and the People’s Committee of Lao Cai regarding the extension of temporary sugar import licences which expired on December 31, 2017 to the end of 2019.

In 2015, the Government allowed the temporary import of 220,000 tonnes of sugar (mainly from Thailand) through certain border gates in Lao Cai Province until the end of 2017. However, a report by the province said that only 43.73 per cent of the permitted volume was imported and several companies temporarily imported sugar but had not re-exported.

For this reason, the ministry and the northern province called for an extension to the temporary import licences.

However, the proposal was worrying for both farmers and domestic sugar producers who were facing high stockpiles and plunging prices.

The association proposed an inspection group be set up to evaluate the temporary import and re-export of sugar via Lao Cai Province.

According to the association, sugar had been in the 2018-19 harvest crop for nearly two months but the inventories at domestic sugar plants from the previous crop still amounted to 200,000 tonnes.

Domestic sugar producers faced difficulties in sugar sales after the market was flooded with illegal sugar imported from Thailand, pushing down the domestic sugar price to around VND11,000-13,000, the association said.

Some domestic plants were at risk of shutting down.

Pham Quoc Doanh, the association’s chairman, said that if the temporary import of sugar was extended to 2019, this would kill the domestic industry.

Doanh added that a large volume of temporarily-imported sugar had not been re-exported, estimated at around 40,000 tonnes.

He estimated that the crop inventories might amount to 500-700 tonnes.

Dang Van Thanh, chairman of Thanh Thanh Cong Tay Ninh Sugar JSC., said that by 2025, more than half of the current 40 domestic sugar plants might have to shut down.

The association also proposed a fund be established to support the domestic sugar industry, according to Doanh. In addition, a sugar industry restructuring project should be approved together with a law on sugar to ensure the legal framework for the development of the industry, he added.