The Ministry of Industry and Trade will permit sugar importers to fulfill import plans under a current import quota of 250,000 tonnes – despite calls by domestic sugar manufacturers to reduce the quota in light of a large domestic surplus they estimate to be as large as 525,000 tonnes.

Sugar import quotas for 2011 would remain unchanged, Deputy Minister of Industry and Trade Nguyen Thanh Bien told a press conference in Ha Noi yesterday, organised by the Ministry of Industry and Trade (MoIT) and the Ministry of Agriculture and Rural Development (MARD).

Between now and July, a total of 670,000 tonnes of additional sugar, from production, existing inventories and imports, would be added in the domestic market, Bien said.

“These sources will satisfy high seasononal demand,” he said.

Last month, cane producers urged MoIT to lower the 250,000-tonne import quota. In response, MoIT said the next cane harvest would yield enough to process 1.1 million tonnes of sugar, 200,000 tonnes more than in the previous harvest. Domestic consumer and industrial demand was continuing to rise, however, with the demand of beverage makers alone increasing by 30 per cent.

Overall domestic demand was therefore estimated to reach 1.4-1.5 million tonnes this year.

Nguyen Loc An, deputy director of MoIT’s domestic market services department, said lower import quotas might result in a shortage later in the year, especially in the summer season and for the Mid-Autumn Festival, and MoIT decided that the 2011 import quotas of 250,000 tonnes remained reasonable in place since the beginning of the year.

MoIT also criticised sugar manufacturers, which have shown no inclination to lower prices or reduce their profit margins, despite the market surplus. The current retail prices of refined sugar were VND21-24,000 (US$1.15-1.30) per kilo – much higher than production costs, the ministry said.

Meanwhile, sugar was estimated to retail at prices of VND17-17,500/kg, which would guarantee adequate profits for cane farmers and sugar processors. Retail sugar prices last year soared as high as VND27,000/kg, and many manufacturers refused to enter contracts with distributors or industrial producers, generating a fever on the domestic market and leaving many beverage and confectionery makers unable to purchase supplies necessary for production.

Viet Nam Sugar and Sugar Cane Association Chairman Nguyen Thanh Long said that domestic manufacturers were also facing difficulties due to high lending interest rates and declining prices on the global market.

To help domestic producers and stabilise the local market, MARD has asked for Government support to establish a reserve of 200,000 tonnes of sugar to meet end-of-year demand.

Meanwhile, MoIT has said it would implement several measures to help domestic manufacturers. Only contracts under open letter of credit would be allowed to deliver in May and June, while others would be extended through July.

Industrial producers would also be encouraged to use domestic suppliers wherever possible, Bien said.

In the first four months of the year, around 53,250 tonnes of refined sugar were imported, a year-on-year decline of 31,000 tonnes. From the beginning of the year to April 15, sugarcane makers sold 468,000 tonnes, a year-on-year increase of 80,000 tonnes, MARD reported.

A total of 1.14 million tonnes of sugar would be refined from the 2010-11 harvest, MARD predicted, higher than earlier forecasts by 100,000 tonnes.

Heat, saltwater hits sugarcane crops

An intrusion of saltwater together with prolonged hot weather, has damaged sugarcane crops grown in the southern province of Soc Trang’s Cu Lao Dung District.

Around 30ha of newly planted sugarcane suffered damage in the local commune of Dai An 1, where sugarcane fields make up 85 per cent of agricultural land.

Local farmers have been hit hard, most of whom cannot afford to replant damaged sugarcane, a local farmer from Doan Van To Village, Vo Tan Thanh said.

To date, the district has planted 5,200ha of sugarcane, 67 per cent of the initial plan. Local farmers are currently waiting for rain in order to replant vacated areas.

Due to the prolong drought, the 2011-12 sugarcane harvest will occur one month later than usual, which will affect the quality and quantity of sugar.

Last year, 830ha of sugarcane was damaged by intrusion of saltwater and drought throughout the district with total damage valued at around VND12.5 billion (US$595,000), said vice chairman of the district People’s Committee, Pham Hong Van.

In order to limit damage, drainage systems need upgrading in order to prevent strong tide and saltwater intrusion, Van added.

According to the chairman of Dai An 1 Commune’s People’s Committee, Pham Van Tam, recent years climate change has severely affected local agricultural production.

Source: VNS