Sugar factories see raw material shortage

As the province with the biggest sugarcane area in the Southeast region, Tay Ninh Province has three plants with a capacity of 15,000 tonnes of sugarcane per day. - Photo saigontimes

As the province with the biggest sugarcane area in the Southeast region, Tay Ninh Province has three plants with a capacity of 15,000 tonnes of sugarcane per day.

However, the sugarcane crop cultivation area in the province for the 2015-16 period is 50 per cent less than the crop in the previous season.

The sugarcane fields in the region have been shrinking rapidly, according to a research conducted by provincial authorities in the Mekong Delta region.

Long An Province's sugarcane area has shrunk by one-third compared with last season, and Hau Giang Province fell by 1,300ha to 11,000 ha this year.

Dao Van Su, deputy director of Soc Trang Province's Department of Agriculture and Rural Development, told Tuoi Tre (Youth) newspaper that, like other provinces, Soc Trang had faced a decrease in its sugarcane area.

Although Cu Lao Dung District had the biggest sugarcane area in the province with more than 7,400ha, farmers shifted to cash crops and brackish water aquaculture over nearly 60 per cent of the sugarcane area.

They did so after facing long-term losses caused the low prices of sugarcane compared to other plants as well as disease outbreaks. The 10-20 per cent increase in production costs for fertiliser, pesticides, labour and shipping was also a contributing factor.

Competition among sugar plants for raw materials has also increased the price of sugarcane.

The plants are now buying sugarcane for at least VND860 per kilo, VND119 higher than the price set by the Ministry of Agriculture and Rural Development, according to the Viet Nam Sugar and Sugarcane Association (VSSA).

Solutions

Truong Van Phi, agricultural director of Thanh Cong Sugarcane and Sugar Joint Stock Company in Tay Ninh Province, said that to meet raw material demand, the company took proactive actions to ensure supply. It signed supply contracts with farmers in neighbouring provinces and rented Cambodian land to plant sugarcane.

Over the long term, the company will cooperate with the local agricultural sector to invest in high-yield seeds and modern technology to reduce production costs and stabilise material zones.

Nguyen Thanh Long, chairman of VSSA, said the agricultural sector should restructure the sugarcane sector to raise the plant's value and output, and to meet domestic as well as export demands.

Small factories with a capacity of less than 1,000 tonnes of sugarcane per day should be merged, he said, adding that inefficient material zones should be shifted to other crops.

The Ministry of Agriculture and Rural Development recently drafted a decree on sugarcane production and trading, which called for provinces' financial departments to set prices for raw materials, in discussion with farmers and sugar processing plants.

Under a circular issued in 2012 by the ministry, raw materials must meet national quality standards.

The ministry has also conducted a research project on new disease-resistant sugarcane varieties with high productivity.

Government agencies have also been urged to develop large-scale raw material areas and encourage linkages among local farmers to reduce production costs and increase quality.