Vietnam has great potential of exporting millions tons of sugar per year but in fact the country has to buy hundreds of thousands of tons of sugar annually, making it being one of top concerns raised by the government in the recent years.
The sugar imports are aimed mainly to satisfy local demand as the sugar industry has failed to fully exploit its potentials, said the chairman of the Vietnam Sugar and Sugarcane Association (VSA), Le Van Tam.
Tam also blamed the situation on inadequate processing facilities at sugar refineries and sugarcane shortages over the years.
The country currently has 37 sugar plants, with a total processing capacity of 75,810 tons of sugar per day. Six are foreign-invested plants that are capable of processing 4,500 tons of sugarcane per day; the remaining 31 local plants process a daily average of 1,570 tons.
Almost all sugar refineries nationwide are smaller and fitted with outdated and inefficient Chinese machinery, which are unable to supply enough sugar for the domestic market.
Insufficient input material is one of the major factors seriously affecting the production capacity of local sugar factories. “The country has been dedicating a majority of land to a small-scaled and unstable sugarcane area,” said Tam, adding that thin supply of sugarcanes has discouraged sugar refineries to invest more in production expansion.
However, the chairman also asserted that a bright future of exporting sugar will be certainly achievable if the below-mentioned tasks are done carried out.
The most urgent task is to comprehensively upgrade and modernize all existing sugar factories and scale down any plants with a capacity of less than 3,000 tons per annum. As Vietnam enters the World Trade Organization, imports will be not limited by quotas and tariffs. At that time, only large-scaled factories will be able to survive and compete with big rivals in the world market.
“It is necessary to set up more large-scale and stable sugarcane growing zones near sugar factories throughout the country to ensure sufficient materials for production,” Tam highlighted.
In the short term, the government should allow the further importation of raw sugar for refinement with a view to temporarily calm the sugar fever in the domestic market, Tam said.
According to an estimate from the association, Vietnam is likely to face a possible sugar shortage of 300,000 tons this year, up 100,000 tons over the previous forecast.
In the 2004-2005 crop, local sugar refineries reportedly produced as few as 1.08 million tons of sugar, about 125,000 tons less than in the previous crop, failing to meet domestic market demand, which was estimated at 1.2 million tons.
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