Bitter taste for sugar mills

French-backed Bourbon Tay Ninh Joint Stock Company said material shortages were proving a major headache.

“We are anxious about how to have sufficient sugarcane materials. Our company has 12,000 hectares of sugarcane, enough for only 50-60 per cent of our $52.6 million sugar mill’s processing capacity. We need 16,000-18,000ha to meet the capacity,” said the company’s general director Pham Thi Thu Huong.

Huong told VIR that bad weather had harmed sugarcane and undermined Vietnam’s 40 sugar mills.

“Thus, this crop’s sugarcane material shortages are particularly worse than previous crops. Most of  the 40 sugar mills have been operating only moderately due to serious material shortages,” she said.

Vu Van Luong, representative of Indian-backed Nivl Joint Stock Company’s material management division, said the $32 million company had been suffering from sugarcane material shortages since 1997 when it began operating in southern Long An province.

Nivl has two sugar mills in the province’s Ben Luc and Duc Hoa districts, with a total processing capacity of 7,500 tonnes of sugarcane per day.

“Meanwhile, we have only 11,000ha of sugarcane, with total output of 700,000 tonnes, which can meet less than 70 per cent of the mills’ capacity. We have to buy the remaining needed materials, but it is very difficult,” Luong told VIR.

In another case Ca Mau province-based Thoi Binh-Ca Mau Sugar Factory was built in 1999, with a total processing capacity of 1,000 tonnes of sugarcanes per day. To ensure the factory’s stable operation, the province zoned 6,000ha for planting sugarcane for the factory. However, the area has been reduced to only 1,200ha, due to farmers shifting to other industrial trees and raising shrimp.

The plight is also shared by Ben Tre province-based Ben Tre Sugar Factory, whose sugarcane area has been slashed by 70 per cent since 2000.

“We have had to shrink our production. This has badly affected the livelihoods of many workers,” said factory director Le Thanh Son.

Vietnam’s sugarcane is mostly planted in some south central provinces and the Mekong Delta, covering 250,800ha. The Mekong Delta has 48,000ha of sugarcane expected to bring in 3.2 million tonnes of sugarcane, while the delta’s 10 sugar mills will need 3.6 million tonnes of the raw material.

The Ministry of Agriculture and Rural Development (MARD) said the country’s sugarcane plantation area had to compete with other industrial trees such as rubber, coffee, pepper and cashew, which were more profitable than sugarcane.

“Despite sugar price hikes, production mills do not buy sugarcane at high prices from farmers. However, when sugar prices decrease, they immediately lower buying prices of farmers’ sugarcane. This means that mills will never have enough sugarcane for their production,” said MARD deputy minister Diep Kinh Tan.

According to Vietnam Sugar and Sugarcane Association, the 2010-2011 crop will see a total output of up to one million tonnes of sugar, up 15 per cent against the previous crop.