Sugar cane farmers aren’t making profit: sugar association

16:50' 29/04/2008 (GMT+7)
VietNamNet Bridge – Millions of sugar cane farmers are weeping as sugar plants have reduced sugar cane material prices. Meanwhile, sugar plants are miserable as they have had to reduce sale prices and struggle with smuggling.
Dr Ha Huu Phai, Secretary General of the Vietnam Sugar Cane and Sugar Association, said that under WTO and AFTA commitments, Vietnam will allow the import of 58,000 tonnes of sugar in 2008 with the tax rates of 40% and 20%, respectively, for WTO and AFTA commitments. Currently, everyday, 400-500 tonnes of sugar are being illegally smuggled through the Southwest and Lao Bao Border Gate, causing the loss of VND500mil to the state budget collection.
Vietnam-made sugar cannot compete with Thailand-made products, which have lower production costs thanks to lower sugar cane prices and more modern production technology. Thailand-made sugar is always VND300/kg lower than domestic products.
Domestic sugar plants have had to reduce sale prices and sugar cane purchasing prices, making millions of farmers suffer. A lot of sugar plants have been working perfunctorily, and some of them have had to shut down workshops.
In fact, all sugar plants in the north and central region have signed contracts on consuming all sugar cane of farmers. However, with the current purchasing price of VND350-450,000/tonne, farmers cannot get profit with more expensive fertiliser, fuel and labour costs. Meanwhile, sugar plants cannot raise the material purchasing price, since the sugar price remains low.
Currently, the production cost of every kilogramme of white sugar is VND7-7,500/kg in the north and VND7.5-8,000/kg in the south. The high production cost and low sale price of sugar (less than VND8,000/kg) have made many sugar plants incur losses.
Explaining the high price of sugar cane production costs, Phai said that sugar cane productivity and quality both are worse than those of regional countries. Vietnam’s sugar cane productivity is 54.8 tonnes/ha (the figure is expected to reach 65 tonnes/ha by 2010), while China’s productivity is 70-80 tonnes/ha, and Thailand’s the same. The commercial cane sugar (CCS) of Vietnam’s sugar cane is just 8-10 CCS, while China’s 12-14 and Thailand’s 14-16.
Phai has called on state management agencies to keep stricter control over sugar imports in order to stop illegal smuggling of sugar through border gates.
Moreover, Phai thinks that the state should programme the development of material growing areas for sugar plants, ensuring sugar cane output for sugar plants to run at full capacity.
It is expected that four state owned sugar plants, including Kon Tum, Tra Vinh and Soc Trang, will be equitised.