Domestic sugar market is heating up in Vietnam as retail prices of sugar have hit a record high of VND12-13 million (US$759.5-822.8) per ton, doubling last year’s level, sources from a local newspaper reported.
The price hike is mostly attributed to a serious shortage of sugar, resulting from a sharp reduction in sugar output, which was caused by input sugarcane scarcity, poor management, and backward processing facilities.
Local sugar refineries reportedly produced as few as 1.08 million tons of sugar in the 2004-2005 crop, about 125,000 tons less than in the previous crop, failing to meet the domestic market demand, which was estimated at 1.2 million tons.
It is the first time local consumers have faced high sugar prices since the beginning of this sugar crop. Traditionally, sugar prices only increase before mid-autumn as the demand for sugar is at its highest in the year.
Food producers, especially small-sized enterprises, stand be particularly hard-hit by the price hikes as they are in crucial need of large amounts of sugar to make jams, candies, cakes, and soft drinks for the upcoming Tet holiday.
Sugar prices are projected to continue to climb in the coming time as the sugar shortage is forecast to get fiercer and fiercer for the 2005-2006 crop.
The domestic sugar output will only reach some 90,000 tons per month this season, down 40 per cent against the same period last year. Recently prolonged cold weather has reduced the sugar content in sugar cane, causing a lower sugar output than previously estimated.
Increasing domestic sugar price alongside insufficient sugar supply has caused smuggling of black market sugar to increase at border gates, said an official from the Ministry of Agriculture and Rural Development.
At least 30-50 tons of Thai sugar are being slipped daily into the country through the border gates in Mekong Delta An Giang, Kien Giang, and Dong Thap provinces, the officials said, adding that consumers pay only VND8,640 for each kilo of Thai sugar, VND4,000 lower than the domestic price. The People, Youth
Vietnamese
