Sugar is packed at Quang Phu Sugar Plant in the central province of Quang Ngai. The sugar industry faced oversupply ahead of the 2014 to 2015 season with total sugar inventories estimated at 251,240 tonnes by the end of this year. — VNA/VNS Photo Thanh Long

HA NOI  (Biz Hub) — Revamping the process from plantation to production to consumption were critical for the sugar industry to overcome the prices that had fallen in three consecutive seasons.

According to Doan Xuan Hoa, Deputy Director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, the sugar industry was facing oversupply ahead of the 2014 to 2015 season.

In the 2014 to 2015 season, there was a plan to reduce the total sugar-cane plantation area to 300,000 hectares from 309,400 hectares previously, with the total output reaching 1.6 million tonnes.

Hoa said that in order to deal with sugar oversupply, the sugar and sugarcane association needed to join hands with enterprises to raise the consumption plan in 2014 coupled with an export plan to ensure market stability.

He added that planning of sugar and sugarcane development to 2020 with vision to 2030 would be reviewed to ensure compliance with the reality, potential and competitiveness of Viet Nam.

Deputy Minister of Agriculture and Rural Development Vu Van Tam, said at Thursday's conference that sugar processing companies must revamp their production in order to cut costs, which was vital for competition.

He added that the planning of cultivation areas should be revamped to ensure efficiency and productivity.

In the 2013 to 2014 season, sugar plantations signed contracts with farmers to consume the sugarcane of nearly 267,000 hectares, making up for 90 per cent of the total concentrated plantation area.

Difficulties

According to the statistics of the Ministry of Agriculture and Rural Development, sugar stockpiles reached 548,940 tonnes as of June 15, up 56,430 tonnes against the same period last year. By the end of this year, the total sugar inventories were expected to reach 251,240 tonnes.

Sugar prices were seen falling from VND18,000-19,000 (US$0.84-0.89) per kilogramme in 2011 to VND14,500-15,000 ($0.68-0.7) per kilogramme in 2013.

The price of one kilogramme of sugar, including value-added taxes, has dropped to between VND12,400 and 13,000 ($0.59-0.61) since March.

A representative from the Viet Nam Sugar and Sugarcane Association earlier said that smuggled sugar, which amounted to hundreds of thousands of tonnes a year with lower prices, was a big headache and harmed local producers amid a huge volume of sugar stockpiles.

At the end of June, the Ministry of Agriculture and Rural Development proposed to the Ministry of Industry and Trade not to extend sugar export licences granted in the first half of this year but instead granting them for 200,000 tonnes of sugar at the end of this year. — VNS