VietNamNet Bridge – Sweets manufacturers have been insisting on
quotas for sugar imports. Meanwhile, domestic sugar refineries weep because of
sugar is unsalable.
Domestically made sugar expensive
Vietnam expects to have the
output of 1.5 million tons of sugar from the 2012-2013 crop, while it would
consume 1.35 million tons.
Though the domestic sugar price
has been on the decrease, the price is still 10-15 percent higher than that in
regional countries.
According to Trinh Minh Chau,
Deputy Chair of the Vietnam Sugar and Sugar Cane Association, Vietnam’s sugar
cane has the lowest quality in the world, but its sugar price is always the
highest. Especially, sugar cane materials gobble up to 80 percent of the total
production costs.
The sugar refineries in the
Mekong Delta have to spend 12,500 dong to buy sugar cane in order to make out
one kilo of sugar. Meanwhile, Thai refineries only need 6000 dong.
The production cost of one kilo
of sugar in Vietnam is 15,500 dong, while it is less than 10,000 dong in
Thailand. This explains why Vietnamese food and sweets manufacturers refuse
domestic products and insist on import quotas.
Truong Phu Chien, General
Director of Bibica, a confectionary producer, said the domestic sugar prices
fluctuate all the time, which makes it impossible for enterprises to set up
their plans.
The prices could drop to
13,000-15,000 dong per kilo, and could be as high as 17,000-20,000 dong per
kilo. Therefore, domestic sugar supplies would only be used for small and
seasonal contracts.
Bibica, for example, buys 100
tons of sugar a month only, and it may place order with different plants.
An executive of Tan Hiep Phat
Company also complained that the company needs 40,000-50,000 tons a year, the
high volumes which cannot be satisfied by many refineries in Vietnam.
“We always hear that sugar runs
out when we ask to purchase sugar. Meanwhile, the prices are always 15 percent
higher than the world prices,” he complained.
Vietnamese enterprises don’t like Vietnam’s sugar?
The executive said that while
they meet too many problems when buying sugar from Vietnamese refineries, they
can make deals very easily with foreign exporters.
Domestic refineries always
require high deposits from buyers. Meanwhile, this is not welcomed by clients –
the businesses who have been struggling hard to survive the current difficulties.
According to Vu Quoc Tuan, a
senior executive of Nestle Vietnam, when buying sugar from domestic refineries,
the company has to pay 50 percent of the value of the consignments in advance.
Meanwhile, if it imports sugar in accordance with the quotas granted by the
Ministry of Industry and Trade, it has to pay 10 percent of the values of
consignments in advance.
As such, domestic enterprises
prefer importing sugar instead of using domestic products, because they can
feel more secure with the flexible payment method and stable prices.
Tuan has affirmed that Nestle
Vietnam’s sugar imports account for 60 percent of the total amount of sugar
needed for the production.
Nguyen Thanh Long, Chair of the
Sugar and Sugar Cane Association, said sugar cane crops in Vietnam always
depend on the weather, while there has been no close cooperation between
farmers and refineries.
Long said the association is
persuading refineries to collect sugar cane from farmers before the flood
season. However, refineries still keep hesitant to buy materials at this
moment, since they see the prices going down. Meanwhile, most of the
enterprises are incurring loss, and they would incur heavier losses if they buy
sugar cane now at high prices.
Nam Phong
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