The Ministry of Industry and Trade has decided to apply measures to prevent evasion of trade remedies against sugar products imported from five ASEAN countries that use Thai sugar materials.

It will impose an anti-dumping duty of 42.99 per cent and an anti-subsidy duty of 4.65 per cent on sugar coming from Laos, Cambodia, Indonesia, Malaysia, and Myanmar.

However, the imported products will not be subject to the anti-evasion measures if proven to be made from sugarcane harvested in these countries.

The tariffs will take effect seven days after the issuance date of the decision (August 2) until June 15, 2026, unless the decision is superseded by new ones from the ministry.

The decision followed an investigation by the ministry’s Trade Remedies Authority which concluded that Thai sugarcane products subject to anti-dumping and anti-subsidy taxes have entered the Vietnamese market through the five countries.

The ministry imposed the duties on a number of sugarcane products originating from Thailand in June last year.

According to the ministry, the decision was issued on the basis of an objective and transparent investigation process in accordance with domestic laws and in line with international commitments.

Data from customs agencies shows that the volume of sugar imported from the five countries surged to 527,200 tonnes from 107,600 tonnes soon after Viet Nam initiated an investigation into sugar from Thailand in October 2020.

Meanwhile, the volume of sugar imported from Thailand fell by nearly 38 per cent to 595,000 tonnes.

The ministry will continue to co-ordinate with the Ministry of Agriculture and Rural Development, the General Department of Customs and other relevant agencies to monitor the impact of the trade remedies.

Truong Dinh Cu, external affairs director of KCP Vietnam Industry Co., Ltd., said demand for domestic sugar is weak due to abundant foreign supply, and firms have to cut back on production.

Domestic firms only have a 20 per cent market share, he added.

Nguyen Trong Tung, director of Phu Yen Province’s Department of Agriculture and Rural Development, said smuggled products are mixed with domestic sugar upon entering Viet Nam or have their packaging changed to allay suspicion.

Some smugglers even pre-pack Thai sugar in Cambodia before bringing it into Viet Nam overland.

Nguyen Dinh Chien, head of the raw materials department at Tuy Hoa Sugar Joint Stock Company, said as the Thai Government grants subsidies to its sugar exporters, Thai sugar is always cheaper than its Vietnamese counterpart, encouraging smuggling into the country.

According to the association, prices have dropped to around VND18,000 per kilogramme for refined sugar and VND17,200 for unrefined sugar this year, while smuggled products cost just VND16,400.

Sugar producers find it impossible to cover their production costs, and many find the profits unsustainable and cease operations.

During the last sugarcane crop, factories produced a total of 750,000 tonnes of sugar but only 50 per cent was consumed. High inventories and plummeting prices threaten more producers.

According to the association, only 25 out of 41 sugar factories manage to remain in operation.

Some 3,300 workers have lost their jobs and nearly 100,000 farming households have been affected.

Annual demand for sugar is around 2.2 million tonnes but sugar imported legally and smuggled into the country together account for around two million tonnes, according to the association.

Around 1.4 million tonnes of sugar were imported from those five countries in 2021 and 600,000 tonnes in the first five months of 2022, the association said. — VNS