VietNamNet Bridge – The sugar plants in Mekong Delta have just started the new sugar cane pressing season, but they can foresee loss.

In fact, both enterprises and farmers have been incurring loss over the last three years due to the high inventories, and they do not feel happy with the good crops.

Nguyen The Tu, Head of the Phung Hiep district’s agriculture sub-department, said by September 25, 2013, local farmers had harvested sugar cane on 1,175 hectares out of the total 9,553 hectares.

The production cost is VND810 per kilo of sugar cane. However, farmers have to sell sugar cane at very low prices, below the production cost. According to Nguyen Van Dua in Phung Hiep district in Hau Giang province, merchants now collect sugar cane at the fields at VND700-850 per kilo.

“The households which can sell at above VND810 per kilo can make profit. If not, they will take loss. In general, farmers cannot make profit this crop,” Tu said.

As such, by 2013, farmers have incurred loss with sugar for three consecutive years. They have got tired with sugar cane, the plant which helped a lot of households escape the poverty in previous years.

The local authorities, in an effort to help farmers make profit amid the sugar cane price decreases, have encouraged farmers to grow other crops on some areas.

“We are encouraging farmers to shift to other crops, such as oranges and lemons. The other 5,000 hectares of sugar cane would be retained to provide materials to the sugar refinery,” he said.

A report of the Ministry of Agriculture and Rural Development showed that by September 15, 2013, the inventories had reached 221,310 tons, a decrease of 93,700 tons from the month before. However, the figure was still higher by 99,000 tons over the same period of the last year.

According to the Vietnam Sugar and Sugar Cane Association within one month from August 15 to September 15, sugar refineries sold 102,000 tons of sugar, or 36,300 tons higher than the same period of the last year.

However, this is not the good news. A representative of VSSA said the inventories would increase again sharply in some months, as sugar plants have started the sugar cane pressing. It is estimated that 1.6 million tons of finished sugar would be made this crop, while there would be no increase in the local consumption and the expected exports to China.

“The inventories would be still high,” he said.

Tu worries that the high inventories would force the sugar cane prices down, thus making farmers suffer.

Sugar refineries have expressed their worry that their products would be unsalable because of the smuggled sugar entering the domestic market from the border areas in Mekong Delta, including An Giang, Dong Thap, Long An.

Under the WTO commitments, Vietnam would import 70,000 tons of sugar a year at maximum.

The Ministry of Industry and Trade has granted the quotas for sugar import in 2013. The Bien Hoa Sugar Company has been allowed to import the biggest amount of 20,000 tons of raw sugar to make refined sugar. Vinamilk has been allowed to import 16,000 tons, Red Bull Vietnam 1,000 tons.

TBKTSG