No problem with our prices say domestic sugar producers

The Ministry of Agriculture and Rural Development have said it is unreasonable that domestic sugar is more expensive than imports. However, sugar producers are denying the charge.

In recent months the sugar price has climbed to a new height of 21,000-22,000 dong per kilo.

Domestic sugar producers, while admitting that the price is now high, say the high price is reasonable. They have also denied the fact that they are trying to store goods and not sell sugar at this moment in anticipation of further price increases. The producers said that no one dares do that because they are bearing high loan interest rates.

K. Subbaiah, general director of KCP Vietnam, said sugar producers have had to raise sale prices because they have to collect sugar cane from farmers at a high cost. As cassava is now bringing higher profit to farmers, they are now tending to chop down sugar cane plants to grow cassava, which may cause a dearth of raw materials.

Other producers also said that the sugar cane price has increased two fold, therefore, the two fold increase of the sugar price is reasonable.

The sugar cane price is now at 800,000-950,000 dong per tonne in Mekong Delta, 730,000-800,000 in the central region and 580-650,000 dong per tonne in the north.

Meanwhile, Pham Thi Thu Huong, general director of Bourbon Tay Ninh, has warned that if Vietnam tries to keep sugar prices low, it may lead to sugar going to Cambodia, where the price is higher than in Vietnam

According to the Ministry of Agriculture and Rural Development, the inventory volume of sugar plants by January 12, 2010 had reached 137,000 tonnes.

Some sugar producers argue that the sugar price is now high partially because retailers are demanding overly high profits. The retail price is now at 21,000-22,000 dong per kilo, while producers are selling at 16,500-17,700 dong per kilo only.

Meanwhile, Dinh Thi My Loan, secretary of the Vietnam Retailers’ Association said most association members cannot purchase sugar directly from producers, while they have to purchase sugar from 1-class sales agents. Currently, retailers’ cost price has reached 19,500 dong per kilo already.

In the latest news, the Ministry of Industry and Trade has granted quotas to import 150,000 tonnes of sugar in 2010. The decision was made after the ministry learned that the total output of the 2009-2010 crop is just under one million tonnes, lower than the expected 1.3 million tones.

Participants, who attended the yesterday’s workshop on sugar pricing, said that it is necessary to allow trade companies to import sugar as well, instead of allowing big sugar users to do that

They have also proposed to build up a scheme for a national sugar reserve together with rice and salt reserves

VietNamNet/TBKTVN

Tags: Vietnam Sugar Prices