The additional import of 100,000 tonnes of sugar approved by the Ministry of Industry and Trade (MoIT) has raised concerns for local sugar producers. — VNA/VNS Photo Manh Linh

HCM CITY (Biz Hub) — The additional import of 100,000 tonnes of sugar approved by the Ministry of Industry and Trade (MoIT) has raised concerns for local sugar producers.

Since the beginning of the year, drought and saline intrusion have led to a drop in the sugar yield and the ministry has proposed the Government allow a supplemental import of sugar. In early July, after being approved by the Government, the ministry approved an additional 100,000 tonnes of sugar for import this year, not to mention the import of 85,000 tonnes of sugar under a tariff rate quota (TRQ).

Under Viet Nam's World Trade Organisation Accession Agreement, Viet Nam must establish an annual TRQ for raw and refined sugar (the TRQ covers both products) at a minimum volume. The level is subject to annual increases.

Bui Thi Quy, general director of the Con Long My Phat Sugar and Sugarcane Joint Stock Company suggested the ministry not import sugar at this time.

Currently, sugar stocks nationwide are estimated at around 400,000 tonnes, but prices have only inched up a little bit. Thus the import would not create favourable conditions for the development of the sugar sector, Quy said.

Pham Quang Vinh, deputy general director of the Can Tho Sugar and Sugarcane Company said reports related to sugar imports had not taken into account the amount of sugar illegally imported through border gates.

"According to the Viet Nam Sugar and Sugarcane Association's estimates, the volume of illegally imported sugar every year is not below 200,000 tonnes. If we do not take that into consideration, we will cause a redundancy."

As a consequence, the sugar price will decrease, followed by a fall in sugarcane prices, which will have negative impacts on farmers, exacerbating the hardships they are suffering due to climate change," Vinh said.

General Director of the Sugarcane and Sugar Corporation No 1, Vu Thi Huyen Duc, said the supplementary sugar import needed to be scrutinised.

So far, the importation of sugar under the WTO agreement had not been realised due to slow bidding processes, she said.

The additional import of 100,000 tonnes was unnecessary if we bought 85,000 tonnes of sugar under the TRQ, Duc said.

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam affirmed that the decision to import 100,000 tonnes of sugar was to stabilise the local market.

The ministry had co-operated with the Ministry of Industry and Trade to check some sugar factories and discovered that some enterprises were intentionally hoarding to cause fake scarcity and a hike in prices.

In May, the price of white sugar reached VND17,100 (76 US cents) compared with VND13,000-14,000 at the beginning of the year.

The association's chairman Pham Quoc Doanh said that Government agencies should be flexible to ensure enough supply, create room for local production as well as maintain farmers' and enterprises' benefits.

He estimated an excess of 200,000 tonnes in the coming time if the country purchased 185,000 tonnes plus 416,000 tonnes in stocks.

Doanh suggested that the additional import is a band-aid solution. If enterprises continued hoarding, the 100,000 tonne purchase should be made immediately. Otherwise, it should be stopped.

"In case we are forced to import, we should import more raw sugar than refined sugar, because it will help create jobs for local people," he said. — VNS