Sugar makers seek investment

The Viet Nam Sugar and Sugarcane Association (VSSA) has proposed several measures to improve the sustainability and management of the domestic sugar industry.

In a meeting last Saturday, the VSSA asked Prime Minister Nguyen Tan Dung to allow sugar factories to access more bank loans so they can make payments to sugarcane farmers, who need to invest in more crops.

VSSA vice chairman Do Thanh Liem said that, because the sugar production industry operated from October to May, refineries needed large amounts of capital within a short time to pay sugarcane sellers and transporters. Most of that capital usually came from bank loans, he said.

But the Government has limited credit growth of commercial banks to only 20 per cent.

“The Prime Minister should issue a national sugar reserve policy prepared by the Ministry of Industry and Trade to ensure stable supplies of sugar for markets at home and abroad,” he said.

The association also recommended a decree be issued to establish rules for the sustainable expansion of sugarcane harvesting for ethanol production.

The decree should also allow the sugar industry to sell energy to the Electricity of Viet Nam (EVN) at a price equal to the electricity rate charged by wind-power plants.

The association also asked the ministries of Industry and Trade and Agriculture and Rural Development to allow sugar imports from July to November to make up for sugar shortages in the domestic market.

The association called on the two ministries to issue national standards on raw sugarcane materials to ensure the quality of domestic sugar products, and to develop measures to fight sugar smuggling.

Better harvest

For the 2010-11 sugarcane crop, which began in September last year and finished in July, a combined farming area of 271,000 ha harvested around 15 million tonnes.

Average productivity was 60.5 tonnes per ha, 8.8 tonnes higher than the previous crop, according to the association’s general secretary Nguyen Hai.

“Domestic sugar firms produced 1.15 million tonnes of sugar, a year-on-year increase of 260,460 tonnes while the average sugar reserve was 9.8 CCS (Commercial Cane Sugar), little higher than the previous crop’s figure,” Hai said.

“In general, production for the 2010-11 crop was better than the previous crop, thanks to farmers as well as sugar producers. Farmers also made more money thanks to the agriculture ministry’s policy,” he said.

Under the ministry’s direction, sugar processing plants bought every tonne of sugarcane with 10 CCS at a price equal to the selling price of 60 or 70 kilos of refined sugar.

Hai, however, also said that the sugar industry had met difficulties when the industry and trade ministry allowed the import of 250,000 tonnes of sugar when localities nationwide entered the peak pressing season.

Consequently, sugar prices dropped fromVND20,000 in the early crop to VND16,000 per kilo in May.

Meanwhile, sugar refineries struggled to sell sugar, resulting in an inventory of sugar of 685,709 tonnes. These changes badly affected production and market stabilisation.

To ease the situation, the association asked the ministries to stop importing sugar and prevent illegal sugar imports.

It asked sugar refineries to protect the profits of both farmers and producers.

According to the Ministry of Agriculture and Rural Development, the country will have about 282,000 ha under sugarcane in the 2011-12 crop, an increase of 11,000 ha as compared with the 2010-11 crop.

In the new crop, domestic sugar production is expected to be 1.4 million tonnes plus 78,000 tonnes of imported sugar, under Viet Nam’s World Trade Organisation commitments. This supply would be enough to satisfy domestic demand. — VNS

Tags: Vietnam sugar, Vietnam Sugar Prices