VietNamNet Bridge – The Ministries of Industry and Trade (MOIT) and Agriculture and Rural Development (MARD) have agreed to the proposal to grant quotas to import sugar. However, the argument about the sugar import has not finished yet.

No one wins the verbal battle between food processors and sugar companies. However, the battle still played its important role: it has paved the way for the MOIT to grant the quotas to import 70,000 tons of sugar.

The proposal to allow enterprises to import 70,000 tons of sugar has been co-submitted by both the ministries.

According to MOIT, by July 15, 2012, the inventory volume at sugar refineries had reached 240,000 tons, or 54,000 tons lower than that of the same period of the last year. Therefore, if Vietnam does not import sugar, it may face the sugar shortage, especially RE sugar, especially in September and October, the pre-harvest months.

However, the problem is that the “ask-and-grant” mechanism still exists in granting quotas for sugar import. To date, the list of the companies which get the quotas for sugar import remain a secret.

Do Thanh Liem, Director of the Khanh Hoa Sugar Company, Deputy Chair of the Vietnam Sugar Cane and Sugar Association, said on Dau tu that MOIT has not made public the names of the companies to which it has granted quotas. Therefore, it is unclear which companies would import sugar, and if they would sell sugar imports on the domestic market, or they would import for re-export later for profit.

It happened that some companies asked for the permission to import sugar in big quantities, though their demand was very low. Therefore, in 2011, MOIT then took back the quota to import 850 tons of sugar from the International Food Joint Stock Company and Orana Vietnam joint venture.

Under the current regulations, the sugar products imported in accordance with the granted quotas would be imposed the import tariff of 15 percent, while non-quota sugar imports would be taxed 80-100 percent. As such, the turnover gap in the sugar imports may reach tens of billions of dong. This explains why food processing companies always scramble for the quotas to import sugar.

Thoi bao Kinh te Saigon has quoted Nguyen Hai, Secretary of the Vietnam Sugar Association as saying “that the association has proposed to apply the bidding mechanism to decide which companies would be able to get the right to import sugar.”

Hai said on the newspaper that instead of granting quotas to enterprises, MOIT would invite for bids for the consignments of sugar the government imports. The enterprises that accept to pay highest prices, would win the bids.

In fact, the above said mechanism has been proposed to the watchdog agencies several times. However, the answers given by MOIT are nearly the same: “the conditions in Vietnam still do not allow to apply the mechanism”.

However, Liem said that the bidding mechanism has been successfully applied in the Philippines for a long time, which both ensures the transparency and satisfies the sugar demand from businesses.

“The mechanism the Philippines is following is quite simple which can completely be applied in Vietnam,” Liem said, adding that the quota granting mechanism has become “out of date.”

Deputy Minister of MARD Diep Kinh Tan has advocated the idea that it’s necessary to set up a mechanism to ensure the transparency in sugar import.

Local newspapers have reported that Hoang Anh Gia Lai group of Doan Nguyen Duc, one of the richest Vietnamese businessmen has asked for the permission to import 100,000 tons of sugar from its sugar refinery in Laos. However, Duc has denied this.

C. V