Low demand for Vietnamese sugar due to illegal imports of cheap sugar from countries like Thailand is badly affecting producers and sugarcane farmers. — VNA/VNS Photo Manh Linh

Sugar prices in domestic market have fallen so sharply that sugar mills and sugarcane farmers in the Cuu Long (Mekong) Delta are facing difficulties.

In some markets and supermarkets in HCM City, sugar from big local brands now sells at VND20,000-21,000 (US$0.88-0.92) a kilogramme, down VND1,000-1,500 ($0.04-0.07) from the end of last year.

The prices of other brands are lower at VND18,000-18,500 ($0.79-0.81).

According to Nguyen Van Hai, general secretary of the Viet Nam Sugarcane and Sugar Association (VSSA), sugar prices are low because domestic supply and demand are well matched but a lot of cheap sugar is smuggled into the country.

Vietnamese producers cannot compete with imports.

For instance, the price of sugarcane in Thailand is only about $30 per tonne while in Viet Nam it is around $50, and sugarcane accounts for 75-80 per cent of sugar costs.

According to the VSSA, at the end of last year world sugar prices fell by 25 per cent compared to the beginning of the year.

In a report last month Green Pool Commodity Specialists of Australia said global sugar output last month topped 10.43 million tonnes, leading to a 48.4 per cent increase in inventories, the highest rate in 15 years, putting downward pressure on prices.

All this directly affects sugarcane farmers.

The delta is the country’s largest sugarcane farming area with a total area of 50,000ha under the crop.

Hau Giang Province has the largest area under sugarcane, nearly 11,000ha, and is the main supplier for two sugar mills, Con Long My Phat Sugar and Sugarcane Company and Can Tho Sugar Joint Stock Company (Casuco).

Last month the sugar inventories at companies around the country were estimated about 239,000 tonnes. — VNS