Vietnam Sugar cane and Sugar Association (VSSA) has proposed that the Prime Minister allow importing raw sugar instead of refined sugar to save foreign currency for the 2016-17 crop.

The association sent a proposal to Prime Minister Nguyen Xuan Phuc on the sugar auction this year. It asked the PM to instruct the Ministry of Industry and Trade to officially promulgate the auction mechanism on sugar import quotas following the first successful pilot auction in September.

The ministry successfully organised the auction to import 85,000 tonnes of sugar this year as 11 firms won bids. From these, three companies won bids for import quotas of raw sugar at the price of VND1.53 million per tonne -- Bien Hoa Sugar Joint Stock Company, Thanh Thanh Công Tây Ninh Sugar and Sugarcane Company and Khanh Hoa Sugar Company -- securing a total import quota of 40,000 tonnes.

The eight winners for import quotas of refined sugar at a price of VND1.69 million per tonne were URC Vietnam, Puratos Grandplace Vietnam, Perfetti Van Melle and Coca Cola Vietnam, as well as Nestle Vietnam, Vinamilk, Sanofi Synthelabo Vietnam and a member of the Trung NguyenGroup.

Vietnam must import 85,000 tonnes of sugar this year, following its commitment to the World Trade Organisation. The commitment consists of 40,000 tonnes of raw sugar and 45,000 tonnes of refined sugar.

VSSA said the auction results have been highly appreciated due to the transparency and publicity in managing the sugar import quota.

Accordingly, the association submitted the proposal to the PM to organise the auction for 2017 in the first quarter to facilitate relevant ministries and agencies to manage sugar supply and demand, while allowing importers to be able to prepare their import and production plans.

In particular, VSSA proposed to import all the raw sugar. The reason is that the country has 40 sugar factories with designed capacity of 155,000 tonnes a day, of which, half of the factories’ produce refined sugar.

In recent years, some sugar plants have imported raw sugar to produce refined sugar, creating jobs for labourers.

The organisation said several countries have also imported raw material to produce refined sugar instead of importing refined sugar.

This could help the Government save foreign currency and increase the State budget.

The pilot auction this year brought VND138 billion to the State budget. If the above 45,000 tonnes was raw sugar, the country would save $4.5-5.4 million due to the difference in price of raw and refined sugar.

In addition, the Government could collect taxes from the sugar factories for importing raw sugar.

The country is expected to produce some 1.5 million tonnes from the 2016-17 crop, plus there is a stock of 200,000 tonnes from the 2015-16 crop, along with the import quota and that imported from Laos under the Vietnam-Lao trade treaty, as well as smuggled sugar. Sugar supply will, therefore, be enough for the country’s production and consumption.

VNS