VietNamNet Bridge – Phan Thanh Long, head of the Viet Nam Sugar and Sugarcane Association, told Thoi Bao Kinh Te (VN Economic Times) about the revival of the industry.

Members of a large sugar smuggling gang were arrested before Tet (Lunar New Year). How has this affected supply and demand in the domestic sugar market?

As we know, smuggled sugar output is too large and dominated the domestic market for a long time. The arrest of the kingpin of the large gang before Tet has shaken the whole system of sugar smuggling.

The arrests also abruptly stopped the source of the smuggled sugar from entering the domestic market, caused a shortage of sugar and pushed up sugar prices while demand was on the rise.

Against this backdrop, the association has helped sugar mills to sell their products to stabilise the market and regulate supply and demand in the country.

The association is now reviewing how to ensure the supply for domestic demand and the import of 81,000 tonnes of sugar under the tariff quota at the end of this year.

We have not foreseen the impact of smuggled sugar, while supply is limited and the volatility of prices is inevitable. However, sugar prices remain stable as demand increases.

When the source of smuggled sugar was cut, what was the association's plan to increase the purchase price of sugarcane for farmers? If prices rise, how high will they go?

Now is the transitional period between the sudden cut off of smuggled sugar and the ability to meet the domestic demand. We have to review and check the situation because there is not any agency to accurately assess the amount of smuggled sugar with how many tons a year are needed, though all figures are forecast. The association is trying not to increase sugar prices, but keeps the increase to 5 per cent.

When the prices increased, I directed sugar mills to increase the purchase price of sugarcane for farmers. And then, depending on the evolution of the market, processing plants will continue to increase the purchase price. However, the price increases will not help western farmers receive more benefits, because materials are limited in areas in Cuu Long (Mekong) Delta.

Sugar smuggling has been suppressed and is not likely to recur. What will be the advantages and disadvantages for the sugar industry this year?

The disappearance of illegal sugar will assist the sugar industry. The tax evasions from smuggled sugar has upset prices in the domestic market, effecting farmers and factories. All operations are now back to being transparent and fair. So the sugarcane growers will have a chance to increase their incomes and focus on improving sugar quality.

If the state is still firm in handling sugar smuggling, the sugar mills will keep their minds on their work to invest in better facilities and equipment, and farmers will also grow more sugarcane.

The sugar industry is struggling to improve the quality of their product to compete with imported sugar, with the co-operation of enterprises, the Ministry of Agriculture and Rural Development, as well as the state's stable policy.

VNS