The Ministry of Agriculture and Rural Development said the drought has led to a big shrinkage of the sugar area and productivity in the northern region in the 2005-2006 crop.
In the Mekong Delta region, although the cultivation area is expanded, the quality remains low. Hence, it cannot compensate the output shrinkage in the north.
The total sugarcane area of Vietnam is now only 265,000 ha to harvest 13.5 tonnes of sugarcane. The area shrinks reduced by 15,000 ha while the output falls one million tonnes compared with the 2004-2005 crop.
Smuggled sugar dominating the market The last sugar crop generated 754,200 tonnes of refined sugar, a 16.3 per cent decrease in comparison with a crop earlier. Household units produced 150,000 tonnes, a decrease of 30,000 tonnes. According to the Cultivation Department, due to insufficiency of input materials, all 11 northern sugar factories averagely operated at 55.8 per cent of its designed capacity, 13 central and central highlands factories at 45 per cent capacity and four southern factories at 50.8 per cent capacity.
Owing to poor production performance, the sugar price escalated in recent months, leading to the domination of sugar illegally imported from Thailand. The illegally imported amount can reach 350,000 tonnes. In Dong Ha District, Quang Tri Province, all sugar is illegally imported from Thailand while 80 per cent of sugar in Hue is also illegally imported.
Mr. Le Van Tam, Chairman of the Vietnam Sugarcane and Sugar Association, said, the global sugar output will increase by 3 million tonnes in the 2006-2007 crop. Consequently, the world price tends to fall. The raw sugar price is estimated at US$330-390 a tonne (VND5,300-6,300 a kg) in 6-12 months.
Meanwhile, the price of sugar in the domestic market remains very high (VND9,000-10,000 a kg). According to competent authorities, the inventory sugar in Vietnam is now weighed some 200,000 tonnes. In the coming time, the smuggled sugar will continue inflowing as the domestic price cannot stand below VND8,000 a kg. Further, the export from Thailand to China, Malaysia and South Korea falls and Vietnam is the destination for this volume. At present, Thailand has invested in a sugar processing factory with an annual output of 60,000 tonnes in Cambodia, a neighbour of Vietnam.
Sugar price needs pulling down
Vietnam’s one-million-tonne-sugar programme has a lot of irrationalities. The unconcentrated investment seems unsuitable. For example, the central region is chosen to develop sugarcane although it has a complicated terrain that is almost impossible to develop irrigation.
Additionally, the low productivity of sugar is resulted from old varieties. Up to 55 per cent of varieties were bred in the 1960s. The Department of Cultivation confessed that the proportion of good species is too small while old varieties accounted for 70 per cent. The breeding system is still badly organised. A large majority of sugarcane is grown in mountainous and remote areas where cultivation techniques remain low.
Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said the sugarcane area in the next crop will be expanded to 300,000-350,000 ha but the productivity must be improved to sufficiently supply to sugar factories. Factories must have measures to pull down the domestic sugar price to some VND8,000 (50 US cents) a kg. Otherwise, imported sugar will dominate the Vietnamese market.
Vietnamese
