Dai An Commune's farmers harvest sugarcane in southern Soc Trang Province. A meeting yesterday discussed how to how to raise competitiveness of the industry when the tax drops to zero in 2018. — VNA/VNS Photo An Hieu

HA NOI (Biz Hub) — Viet Nam needed to improve the competitiveness of its sugar industry's competitiveness so it did not lose out in the regional market, especially when the tax rate is cut to zero by 2018 as part of commitments to the ASEAN Economic Community.

Minister of Agriculture and Rural Development Cao Duc Phat made the statement yesterday at a meeting in Ha Noi to discuss measures to raise the competitiveness of the country's sugar industry.

According to calculations, the cost of sugarcane production in Viet Nam is the highest in the world.

Sugar firms are certain to face challenges such as high production costs, inadequate support policies for farmers, unstable business performance and weak co-operation among businesses.

The current production costs of Vietnamese sugar, averaging about VND12 million (US$550) per tonne, is higher than many countries, including Thailand, Brazil and India. Higher prices mean Vietnamese sugar is unable to compete in the world market.

Minister Phat said it was essential for the industry to focus on developing new sugar seeds with higher quality and quantity, and promote collaboration between production and consumption while developing support products to increase added value.

"We need new varieties of sugarcane seeds for farmers, and any organisations or individuals who know of such seeds can contact the ministry. We do not necessarily have to wait for seeds from the Sugarcane Research Institute," he said, adding that 50 per cent of the current seed varieties were from 15 years ago.

He also called on factories to think about building material zones and applying new technology in cultivation as well as production.

The sugar industry should also take advantage of its own by-products, such as producing fertiliser from sugarcane waste.

Illegally imported sugar was another problem for the industry, with an estimated 400,000-500,000 tonnes of sugar imported each year, so tighter control was needed, participants at the meeting said.

Currently Viet Nam has 305,000 ha of sugarcane plantations with a capacity of 65 tonnes per hectare. — VNS