VietNamNet Bridge - Sugar, palm oil and rubber, the three crops that Hoang Anh Gia Lai of Doan Nguyen Duc grows in Vietnam, Laos and Cambodia, have seen prices increasing in the context of a lower global supply due to climate change. Experts predict that the prices of the three crops would continue to go up in 2016.

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President of Hoang Anh Gia Lai Group Doan Nguyen Duc

Hoang Anh Gia Lai Group had a very tough year in 2015 when the prices of goods dropped dramatically, the company met problems with liquidity and investors lost confidence in the enterprise.

Rubber, the plant that Hoang Anh Gia Lai gathered most strength, saw the price tumbling from $5,750 per ton in February 2011 to $1,000 per ton late last year. With such a price, Duc’s farms could not make profit.

Keeping patient is what Hoang Anh Gia Lai’s creditors is doing. However, they may not have to be patient for too long as the prices of sugar, palm oil and rubber have increased again, which allows it to earn more money to pay debts.

Hoang Anh Gia Lai put the sugar & sugar cane production complex in Attapeu province in Laos with the investment capital of $70 million in February 2013. The project comprises a 6,000 hectare material growing area and a plant with the capacity of 7,000 tons a day.

Hoang Anh Gia Lai can enjoy preferential tariff when selling sugar. In 2015, it brought sugar to Vietnam within the quota of 50,000 tons which enjoyed the low 2.5 percent import tariff. And in 2016, the import tariff will be zero percent.

Hoang Anh Gia Lai Group had a very tough year in 2015 when the prices of goods dropped dramatically, the company met problems with liquidity and investors lost confidence in the enterprise.
Meanwhile, the sugar price in the world market has increased by 11 percent so far this year and by 56 percent if compared with the deepest low in August 2015.

Tom McNeill of Green Pool Commodities said the sugar supply is short after five years of oversupply. Besides, the coup in Brazil, the drought in Thailand and India all would make the supply shortage more serious.

The same thing is happening with the palms. The palm oil price fell from $1,100 per ton five years ago to $483 per ton in September 2015, the same level seen when the financial crisis broke out in 2008.

However, the palm oil price has bounced back, reaching $681 per ton.

By the end of 2015, Duc had had 28,600 hectares of palms, including 7,000 hectares in Laos and 21,500 hectares in Cambodia.

As for rubber, Hoang Anh Gia Lai has 38,400 hectares of rubber growing area in Vietnam, Cambodia and Laos, a rubber latex processing plant with the capacity of 25,000 tons per annum in Laos. The rubber price in the world market has increased by 40 percent this year.


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