Sweet dreams of sugar profits dissolving

The high sugar cane prices for previous crops prompted Mekong Delta farmers to expand their cultivation of sugar cane. This year, however, they may not enjoy a sweet crop.

To date, Mekong Delta farmers have cultivated some 55,000 hectares of sugar cane, an increase of 3000 hectares over the 2009-2010 crop.

In Hau Giang province alone, the highest sugar cane growing area in the Mekong Delta, the total sugar cane area may reach 14,000 hectares, an increase of 1000 hectares over 2009.

Tran Van Thang, Deputy Chair of Phung Hiep district’s People’s Committee, explained that the sugar cane price was very high for the last crop at 1450 dong per kilo, so farmers rushed to plant sugar cane.

Phung Hiep district farmers even gave up rice cultivation and farmers in Hoa Luu commune destroyed 8-10 year old mulberry gardens – just to grow sugar cane.

“It’s a pity that we must chop down the 5000 square metre mulberry garden, but we cannot rely on plants that bring low income,” admitted Bay Thanh, a Hoa Luu farmer.

Nguyen Van Thu, another farmer in the commune, also razed a 2000 square metre mulberry garden to grow sugar cane. Thu estimated that the mulberry garden would bring less than two million dong per annum, but, if sugar cane goes for a good price, the profit from 1000 square metres of sugar cane would be equal to that of 5000 square metres of mulberries.

Similar scenes have popped up across the Delta. Soc Trang farmers have destroyed orange orchards in favor of sugar cane. Farmer Sau Thanh noted: “I heard that others got huge net profits of 60 million dong per hectare, so I decided to chop down the 5000 square metre orange orchard to grow sugar cane. I would receive a satisfactory profit if it can be sold for 800 dong per kilo.”

According to Soc Trang’s Department of Agriculture and Rural Development, to date, their farmers have grown 13,000 hectares of sugar cane, an increase of 1000 hectares.

Reports that the domestic sugar price has been decreasing is now worrying sugar cane growers. Farmers worry that the price may drop because of the increased area of cultivation and the resulting high sugar cane output.

Le Van Chieu, a farmer in Hau Giang province, is even pondering his use of fertilizer. “Farmers have rushed to grow sugar cane, raising fears of overproduction. I wonder if I should put down as much fertilizer as I did last year. The fertilizer price has been increasing . . . I may incur a loss,” Chieu questioned.

According to the Ministry of Agriculture and Rural Development, the inventory of sugar has reached 300,000 tons.

The Vietnam Sugar and Sugar Cane Association also confirmed that sugar demand has decreased significantly to 60,000 tons a month from 100,000. Therefore, it would be difficult to consume all the sugar in stock because the sugar cane harvest will begin in late August and early September.

Big stocks and low demand will affect sugar cane collection. Sugar refineries will only collect sugar cane at moderate levels.

Ha Huu Phai, Secretary General of the Vietnam Sugar and Sugar Cane Association, has blamed the big sugar stocks on smuggled imports.

Nguoi lao dong

Tags: Vietnam sugar, Vietnam sugar output 2010