Mekong Delta faced with a surplus in sugar production

Although wholesale price of sugar has plunged from VND18,000 before Tet to VND16,500 now, consumption rate is far too low and sugar processing units are finding it difficult to move their stocks in the market.

Sugar cane being harvested in the Mekong Delta (Photo: SGGP)

Only half the sugar cane crop has been harvested so far, and processing units are worried as their warehouses are piling up and traders are not coming forward.

Trinh Minh Chau, chairman of Soc Trang Sugar Corporation said that Thai sugar output this year moved up by one million tonnes to reach 10.6 million tonnes. Now, illegal trade of this sugar at the southwestern border of the country is on the rise, leading to a pile up of domestic sugar.

Director of another sugar company said that about 500 tonnes of illicit sugar is being transported across the southwestern border every day. A kilogram of sugar brought in from Thailand is costing only VND17,000, increasing pressure on the domestic produce.

According to sugar processing plant owners in the delta, sugar is in abundance, far in excess of consumption levels, but they still must continue to buy sugar cane from farmers at the same set rate to   ensure farmers’ receive profits.

Vietnam Sugarcane and Sugar Association estimates that sugar output across the country might reach 1.43 million tones, a surplus of 300,000 tonnes, which may result in several processing plants suffering losses.

As a result, the Ministries of Industry and Trade, Agriculture and Rural Development should create advantageous conditions for businesses to export about 250,000 of sugar this year, the association said.

Some sugar companies have lamented that export procedures for sugar companies are too complicated, besides quotas are being granted in dribs and drabs, discouraging them further.

The association has proposed to the Government to immediately offer loan assistance and lower interest rates so that processing units can continue to stockpile sugar.

By Cao Phong – Translated by Hai Mien

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