By the end of June 2006, Vietnam had imported 91,019 tonnes of sugar. Meanwhile, all 34 sugar mills have so far produced more than 900,000 tonnes of sugar, excluding 150,000 tonnes produced by private households. The total supply has obviously met local consumption demand, according to experts. As a result, the Vietnam Sugar and Sugarcane Association proposed that the Government stop importing an additional 150,000 tonnes from now till the end of the year.

Earlier, the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Trade (MoT) proposed that the Government import as much as 300,000 tonnes of sugar to “stabilise the domestic market”, reasoning that demand outstripped supply.

However, by the end of June which marked the end of the 2005-2006 sugarcane harvest, sugar producers complained that there were large volumes in stock and they could face losses due to the illegal import of sugar at lower prices. Therefore, the association proposed a halt in sugar imports to stablise market prices and protect domestic production.  
With the MARD proposal, people thought it unnecessary to import other commodities when domestic enterprises can already fulfil consumption demand.

The import of any commodities badly impacts domestic production and causes fluctuations in market prices. Consequently, local-made products have to compete with foreign products in terms of the quality, patterns and prices. And those who work in import-export activities will unfairly capitalise on the situation.

Vietnam is an agricultural country, and sugarcane is plentiful for the sugar processing industry. All this stage on the verge of WTO accession, it is imperative to restrict excessive imports, develop sugarcane growing areas, renew production lines, and seek overseas outlets for the product.

The import of sugar puts more pressure on both sugarcane growers and sugar processors. They face tough competition from imports, as well as difficulties in seeking outlets for their products.

The fact is that Vietnam has many sugarcane processing mills, but they do not operate at full capacity due to a lack of supply. Most production lines still use obsolete technology. In addition, due to high production costs, the domestic sugar finds it difficult to compete with the prices of imported sugar. Meanwhile, co-ordination between growers and processors is unstable.

Sugar is one of the seven essential commodities in daily life, and must receive special attention from the State and agencies through proper management policies and preferential incentives.

To avoid further damage to the sugar industry, the State should review decisions about sugar imports, while taking measures to stop illegal imports across the border. Sugar processors should devise ways to boost domestic production, minimise imports, and stablise market prices.

The association’s proposal to halt the import of 150,000 tonnes of sugar has received strong support from farmers, producers and consumers.