Thai sugar imports sour prospects for domestic producers
Sugar producers in Vietnam have failed to compete with imported products on the local market as traders are using various tricks to avoid taxes.
According to acting general secretary of the Vietnam Sugarcane and Sugar Association (VSSA), Nguyen Van Loc, a large amount of sugar from Thailand has entered Vietnam from neighbouring countries to avoid anti-dumping duties.
"Since Vietnam started imposing anti-dumping duties on sugar imported from Thailand in October 2020, sugar importers have switched to other countries including Malaysia, Indonesia, Myanmar, and Cambodia," Loc said. "The total amount of imported sugar to Vietnam in 2020 reached 1.38 million tonnes which was four times higher than that of 2019. And the country imported nearly 1.2 million tonnes of sugar in the first eight months of this year."
Despite the Covid-19 pandemic, sugar smuggling into Vietnam has become worse in the southern west border of Vietnam. During the first eight months of 2021. Statistics from VSSA showed that Cambodia imported 393,414 tonnes of sugar from Thailand in the first eight months of this year and exported 100,000 tonnes to Vietnam through official channels. Meanwhile, the remaining nearly 300,000 tonnes are being placed at the border with Vietnam to wait for being smuggled into the country.
According to acting general secretary of the Vietnam Sugarcane and Sugar Association (VSSA), Nguyen Van Loc, a large amount of sugar from Thailand has entered Vietnam from neighbouring countries to avoid anti-dumping duties.
"Since Vietnam started imposing anti-dumping duties on sugar imported from Thailand in October 2020, sugar importers have switched to other countries including Malaysia, Indonesia, Myanmar, and Cambodia," Loc said. "The total amount of imported sugar to Vietnam in 2020 reached 1.38 million tonnes which was four times higher than that of 2019. And the country imported nearly 1.2 million tonnes of sugar in the first eight months of this year."
Despite the Covid-19 pandemic, sugar smuggling into Vietnam has become worse in the southern west border of Vietnam. During the first eight months of 2021. Statistics from VSSA showed that Cambodia imported 393,414 tonnes of sugar from Thailand in the first eight months of this year and exported 100,000 tonnes to Vietnam through official channels. Meanwhile, the remaining nearly 300,000 tonnes are being placed at the border with Vietnam to wait for being smuggled into the country.
Vietnamese sugar sector losing ground
Harvesting sugarcane in Vietnam. Illustrative photo
Thu Thua District in the Mekong Delta Province of Long An was once well-known for its vast sugarcane area with about 11,000 hectares of the plant between 2012-2013. However, local farmers have started to switch to other plants since local sugar companies started decreasing sugarcane prices in 2013.
Then the two local sugar companies, Nivl and Hiep Hoa, faced continuous losses and closed, owing a huge amount of money to local farmers.
Vice director of Long An Provincial Department of Agriculture and Rural Development, Nguyen Chi Thien, said that despite lots of efforts, local authorities had failed to help the farmers sell their sugarcane and they finally had to remove the plant from their key plant lists.
"We have to advise farmers to turn to other crops," he said.
Cao Anh Duong, Acting Chairman of the VSSA, said that the local sugar production has reduced in both quantity and quality.
"Many farmers have turned to other plants," Duong reported. "This year the sugarcane area has reduced by 19.83 percent to 187,100 hectares compared to last year's area. Local sugar factories have so far received only 6.7 million tonnes of sugarcane which is one million tonne lower than expected. Sugar production output stood at 901,230 tonnes which was the lowest output in the past 20 years. Nearly half of the sugar factories in Vietnam have closed."
Duong said that after the anti-dumping duties were imposed on imported sugar by the Ministry of Industry and Trade, factories have raised prices of sugarcane to keep the sugarcane farming. However, the huge amount of imported sugar has continued to dominate the local market.
"Locally-produced sugar just cannot compete against imported sugar," the official said.
The Ministry of Industry and Trade has just launched investigations into the practices of sending made-in Thailand sugar to some other countries before importing to Vietnam to avoid anti-dumping duties demanded by the VSSA.
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