Smuggled sugar imports are seriously damaging domestic sugar industry
According to the association, in previous years, smuggled sugar in large quantities with low prices from Thailand seriously affected the domestic industry.
Before the implementation of ATIGA (ASEAN Trade in Goods Agreement), Vietnam had 41 sugar mills which created jobs for 350,000 sugarcane growing households. In 2020, there was a ‘super-storm’ of Thai imports, 1.3 million tons, an increase of 420 percent.
In the 2020-2021 crop, Vietnam’s total sugarcane imports were just 700,000 tons, the lowest level in the last 19 years. In this year’s production season, only 25 sugar mills are still operational, while the other 16 mills have shut down. Of the 25 operational mills, 17 have reported losses.
As a result, 3,300 workers in the industry have lost their jobs and more than 100,000 sugarcane growing households have had to shift to other crops. The sugarcane growing area has been narrowed considerably as income is not high enough to ensure the livelihood of farmers.
Because of Covid-19 in 2020-2021 and the tight control in border areas, smuggling reduced and sugarcane prices were stable. However, as soon as the pandemic was controlled and control in border areas loosened, smuggling increased again.
“The sugar industry is, once again, at risk of being eliminated if sugar smuggling and trade fraud cannot be settled,” VSSA said.
Since December 2021, smuggling activities have picked up in the Southwest border area.
In the market, smuggled sugar distribution networks have been running in open air. The sugar is packed in 12-kilogram and 1-kilogram bags.
Smuggled sugar is cheap as it doesn’t bear a trade remedy tax of 47.64 percent like full-tax imports. Currently, smuggled white refined sugar is VND16,400-16,800 per kilogram, far lower than domestic brown sugar.
VSSA said that smuggling is seriously threatening the sustainability of the sugarcane chain because sugar mills have to operate at a moderate level or stop operation.
The latest sugarcane crop has been completed but many sugar mills cannot sell their products, and they have not paid farmers.
Though agencies have taken action to prevent smuggling, trade fraud still continues.
VSSA has asked the Party Committee’s Chief, National Assembly’s Chair and Prime Minister to take urgent action to solve the problem, and instruct appropriate forces in areas bordering Laos and Cambodia to strengthen control to fight the smuggling.