Sweet sugar import move

“Sugar factories licenced to import raw sugar until July 30, 2011 shall stop imports for signed contracts whose payment has yet to be made and they will not incur compensation. These firms must not sign additional import contracts,” said deputy minister of Industry and Trade (MoIT) Nguyen Thanh Bien.

Accordingly, commercial firms are required to stop signing additional contracts for sugar imports and delay import contracts until end of July 2011.

Businesses using sugar for production have been told to prioritise sourcing local sugar and consider further import of sugar in an appropriate time.

These measures are taken on the heels of a huge sugar stockpile volume by domestic sugar firms. MoIT figures show that 525,000 tonnes of sugar were stockpiled at sugar factories as of April 15, 2011.

There are a variety of reasons behind the existence of such huge sugar stockpiles, including commercial firms’ discretion.

“Commercial firms did not want to hoard sugar amid high lending rates. Besides, they are fearful of the huge sugar volume due to be imported,” said Vietnam Sugarcane and Sugar Association chairman Nguyen Thanh Long.

According to a Ministry of Agriculture and Rural Development (MARD) forecast, local sugar factories will produce around 80,000 tonnes of sugar from April 15, 2011 to end of 2010-2011 sugar crop season. Commercial firms will import around 70,000 tonnes of sugar until the end of July, 2011 based on signed contracts which had opened letters of credit .

The country will then have about 670,000 tonnes of sugar available for consumption until the new sugar crop reason, which is considered sufficient for peak months of hot summer and then serving the mid-Autumn Festival which fall in mid September, 2011.

MoIT executives said the temporary delay of sugar imports would last at least by end of July 2011 and relevant ministries would discuss concrete delay plans.

The solution package was expected to help sugar firms boost sales and sugarcane growers maintain high material prices.