Sugar imports to pressure prices
An import quota of 86,000 tonnes of sugar during 2016 in line with the World Trade Organisation (WTO) rules, coupled with possible imports from Laos, will continue to burden local producers.
According to the Ministry of Agriculture and Rural Development, sugar prices posted increases recently thanks to a drop in inventories to 40,000 tonnes from 100,000 tonnes.
The wholesale price was around VND15,000 (US$67 cents) in mid-December, up VND10,000 compared to October. However, the Vietnam Sugar and Sugarcane Association said that sugar prices would hardly increase in the coming months as sugar factories had planted a new crop since mid-month, which might soon push up inventories.
The Ministry of Industry and Trade would pilot the implementation of tenders for the sugar import quota next year, instead of it being allocated, as in the previous years, to ensure transparency. The association previously proposed that imports of raw sugar should be prioritised.
In recent years, the sugar industry has struggled with high inventories and plunging prices, in addition to pressure from imported and smuggled sugar.
In 2015, Vietnam imported 81,000 tonnes of sugar within the WTO's quotas and another 50,000 tonnes sugar of Hoang Anh Gia Lai procured in Laos at the tax rate of 2.5%.