Sugar import quota up for debate

Tuesday, Feb 10, 2015 08:00

Customers purchase sugar at Big C supermaket on Hoang Van Thu Street in HCM City. Tenders for sugar imports might be carried out this year, instead of it being allocated as in the previous year. — VNA/VNS Photo Thanh Vu

HA NOI (Biz Hub) — Tenders might be invited for determining the sugar import quota this year, instead of it being allocated as in the previous years, to ensure transparency.

The Hai Quan (Customs) newspaper reported that deputy Minister Tran Tuan Anh asked the relevant organisations, including the Ministry of Agriculture and Rural Development and the Viet Nam Sugarcane and Sugar Association, to participate in developing sugar import management policies for this year.

The Viet Nam Sugarcane and Sugar Association had sent a proposal to the Ministry of Industry and Trade to invite tenders for sugar imports in an effort to prevent unhealthy competition in the sector.

The proposal was raised after Hoang Anh Gia Lai Group filed a petition to import crude sugar from Laos, which will be processed in Viet Nam and then exported to China, which the association objected to, saying it will hurt the domestic sugar industry.

The association has proposed two options for inviting tenders.

The first one will be based on the contribution to the State budget, with the highest tenders being selected. After paying the tender to the State budget, importers will be granted a sugar import quota.

The other option is that tenders will be invited for both sugar imports and domestic distribution, which will be aimed at facilitating supply and demand and stabilising sugar prices, the association said.

The association had raised the proposal several times before, but it was denied by the Ministry of Industry and Trade due to the fact that the tender mechanism is not included in the commitment made to the World Trade Organisation (WTO.)

Experts said a tendering process will help ensure transparency in formulating sugar import quotas rather than direct quota allocation.

According to commitments made to the WTO, Viet Nam must grant an import quota of 81,000 tonnes of sugar, which was used as raw material this year. The import quota has been raised by 5 per cent each year from 50,000 tonnes in 2007, when the country joined the WTO.

Last month, the association had petitioned the ministry to halt the sugar import and consider a suitable timeline for the same.

The association estimated that supply might exceed demand by 600,000 tonnes in 2015, which might pull down sugar prices and hit the country's farmers.

The sugar industry is also battling the problem of smuggled sugar, which is estimated to be about 400,000 tonnes per year.

The association's Chairman, Nguyen Thanh Long, said that if the Government agreed to allow Hoang Anh Gia Lai Group to import 50,000 tonnes sugar from Laos with zero import tax as per the Ministry of Industry and Trade's recent proposal, it will impact the domestic sugar industry significantly.

The association added that if allowed to be imported, this amount of sugar must be accounted for in this year's sugar import quota. If not accounted in this year's sugar import quota, a tax rate of 25 per cent must be imposed on this import.

Data from the Department of Processing and Trade for Agro-forestry-Fisheries Products and Salt Production showed that as of January 15, the country's sugar inventory had touched 300,000 tonnes, 12,470 times higher than the same period last year.

In response to the sugar industry's difficulties, the Ministry of Industry and Trade said it will create conditions for companies to expand their sugar exports. — VNS

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