Sugar inventory hits record high
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Sugar plants have reported their highest ever inventory level, nearing 750,000 tons, accounting for 50 percent of their processing output. Explaining reasons for the high inventory yesterday, chairman of Vietnam Sugar and Sugarcane Association (VSSA) Pham Quoc Doanh said that unusual weather has caused material shortage at the beginning of this year processing crop. Sugarcane harvest has concentrated at the end of the crop.
Sugar import quotas, as per WTO commitments, left from last year has contributed to the inventory this year. Illicit sugar import has reached 400,000 tons now accounting for one third of the total processing output.
Mr. Nguyen Hoang Ngoan, deputy director general of Can Tho Sugar Company, said that Thai sugar has illegally imported into the Mekong Delta, the central region and the Central Highlands and been sold at lower than domestic prices.
A kilogram of domestic sugar is priced as low as VND16,000-16,500 a kilogram but it is still unsalable. The company alone has over 20,000 tons in stock.
Stating at a conference seeking sugar consumption solutions recently, deputy Minister of Agriculture and Rural Development Tran Thanh Nam said that the ministry had proposed the Ministry of Industry and Trade to lengthen sugar import under quotas to the third and fourth quarter.
The Ministry of Industry and Trade and the Ministry of Finance should rectify long lasting sugar auction to prevent loopholes for invoice fraudulence.
In long term, the ministry proposed to increase sugarcane productivity and commercial cane sugar (CCS), representing the sugar content of cane, and regulate sugar volume in production and consumption.
Questions & Answers
Q.What is the primary reason for the sugar inventory reaching such high levels?
What is the primary reason for the sugar inventory reaching such high levels?
The main causes include unusual weather leading to material shortages early in the processing crop, last year's unfulfilled import quotas under WTO commitments, and a significant volume of illicit sugar imports into the market.
Q.What measures has the Ministry of Agriculture and Rural Development proposed to address the inventory issue?
What measures has the Ministry of Agriculture and Rural Development proposed to address the inventory issue?
The ministry has proposed extending sugar import under quotas to later quarters and rectifying long-standing sugar auctions to prevent fraud. For the long term, they suggest increasing sugarcane productivity and regulating sugar volume.
Q.How much illicit sugar has been imported, and where is it being sold?
How much illicit sugar has been imported, and where is it being sold?
Illicit sugar imports have reached 400,000 tons, accounting for one third of total processing output. It is being illegally imported from Thailand into the Mekong Delta, central region, and Central Highlands.
Q.Why is domestic sugar unsaleable despite its low price?
Why is domestic sugar unsaleable despite its low price?
Thai sugar is illegally imported and sold at prices lower than domestic sugar. This makes domestic sugar, priced at VND16,000-16,500 a kilogram, unsaleable in comparison.
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