The Vietnam Sugar and Sugarcane Association has proposed to Prime Minister Nguyen Xuan Phuc not to allow an extension for temporary sugar imports for re-export as the sweet industry is struggling with high stockpiles and slumping prices due to illegally imported sugar.

Farmers in the northern Tuy​en Quang province’s Son D​uong district harvest surgarcane.

This is in opposition to a recent proposal by the Ministry of Industry and Trade and the People’s Committee of Lao Cai regarding the extension of temporary sugar import licences which expired on December 31, 2017 to the end of 2019.

In 2015, the Government allowed the temporary import of 220,000 tonnes of sugar (mainly from Thailand) through certain border gates in Lao Cai province until the end of 2017. However, a report by the province said that only 43.73 percent of the permitted volume was imported and several companies temporarily imported sugar but had not re-exported.

For this reason, the ministry and the northern province called for an extension to the temporary import licences.

However, the proposal is worrying for both farmers and domestic sugar producers who were facing high stockpiles and plunging prices.

The association proposed an inspection group be set up to evaluate the temporary import and re-export of sugar via the northern province of Lao Cai.

According to the association, sugar had been in the 2018-19 harvest crop for nearly two months but the inventories at domestic sugar plants from the previous crop still amounted to 200,000 tonnes.

Domestic sugar producers faced difficulties in sugar sales after the market was flooded with illegal sugar imported from Thailand, pushing down the domestic sugar price to around 11,000 VND -13,000 VND, the association said.

Some domestic plants were at risk of shutting down.

Pham Quoc Doanh, the association’s chairman, said that if the temporary import of sugar was extended to 2019, this would kill the domestic industry.

Doanh added that a large volume of temporarily-imported sugar had not been re-exported, estimated at around 40,000 tonnes.

He estimated that the crop inventories might amount to 500-700 tonnes.

Dang Van Thanh, chairman of Thanh Cong Tay Ninh Sugar JSC., said that by 2025, more than half of the current 40 domestic sugar plants might have to shut down.

The association also proposed a fund be established to support the domestic sugar industry, according to Doanh. In addition, a sugar industry restructuring project should be approved together with a law on sugar to ensure the legal framework for the development of the industry, he added.-VNA