return icon

Vietnamese sugar industry is suffering from inventory losses

Currently, the country still has about 650,000 tonnes of sugar on inventory, the industry's highest so far, resulting in 17 out of 36 sugar production factories losing money.


The Vietnamese sugar industry holds nearly 40,000 tonnes of excess sugar


At Son La Sugar JSC, the overstocked sugar volume is nearly 40,000 tonnes with a value equivalent to VND500 billion ($21.74 million). Tuy Hoa Sugar JSC so far still has about 15,000 tonnes, equivalent to more than VND170 billion ($7.39 million).

This was brought about by the low price of sugar and weakening demand, leading to high inventories. With these difficulties, the area of sugarcane plantation has been significantly reduced, causing a reduction in Vietnam's sugarcane production.

After the 23.47 US cent a pound peak in early October 2016, the price of sugar has fallen due to an oversupply. From the beginning of 2019, the price has increased by 5.7 per cent, showing signs of recovery. However, domestic enterprises have yet to see the light at the end of the tunnel as they are also facing another challenge.

Specifically, the country's sugar consumption demand for 2019 is forecasted to reach about 1.5-1.6 million tonnes a year, while production is only 1.2 million tonnes. This overdemand has caused an upsurge in smuggling activities.

In particular, from August onwards, the upstream provinces of the Mekong River, such as An Giang and Dong Thap in the rainy season offer good conditions for sugar smuggling.

According to estimates by the Vietnam Sugarcane and Sugar Association (VSSA), about 500,000 tonnes of sugar are smuggled into Vietnam every year, seriously affecting the domestic sugar industry and prices. Prices in the northern and the south-central provinces are affected the most as these areas produce less sugar and are closer to the entry points of smuggled sugar than the South.

As a result, 17 out of 36 factories producing sugar are running losses and losing equity.

According to research by Prof Dr Vo Tong Xuan, the production cost of sugarcane in Vietnam is too high ($50 a tonne), which makes it difficult to compete with other sugar-producing countries, such as Thailand ($30 a tonne), Brazil ($16 a tonne), and Australia ($18 a tonne).

In 2017, the number of sugar factories across the country has decreased from 46 to 42, and according to the latest update in 2019, the number is down to 36. There are many factories that only operate perfunctorily, so it is difficult to predict exactly how many factories will remain in the 2019-2020 farming season.

According to a representative from the VSSA, over the past two years, many sugar factories faced financial difficulties. As the ASEAN Trade in Goods Agreement (ATIGA) has yet to come into force in Vietnam, many sugar factories have yet to announce the purchase price for sugarcane to farmers because they want to wait out the policy from the authorities. This discourages sugarcane growers from production.

This situation will not only seriously affect the 2018-2019 sugarcane crop, it will also affect the one after, while from January 1, 2020 the ATIGA will take effect.

According to the Mercantile Exchange of Vietnam (MXV), the price of sugar in October 2019 on ICE New York is forecasted to plunge 3.32 per cent to VND5.827 million ($253.35) a tonne.

There are two main reasons for this decline. The first is that the Brazilian Real slipped to a 2.5-month low against the USD. Brazil is the largest sugar producer in the world, and a depreciating currency encourages Brazilian farmers to sell, thereby increasing sugar supply.

In addition, the pressure coming from the plunging oil prices last week – taking oil to the lowest this month and dragging down ethanol prices – is driving Brazilian sugarcane factories to increase the production of sugar instead of ethanol. VIR

Tan Duong


Sugar industry experiencing tough days

Sugar industry experiencing tough days

Comprehensive measures are needed to save the sugar industry.

Mekong Delta sugarcane farmers switch en masse to other crops

Mekong Delta sugarcane farmers switch en masse to other crops

The area under sugarcane in the Cuu Long (Mekong) Delta has shrunk dramatically during the 2019-20 crop after many farmers switched to other crops following losses in recent years.

Sugar industry: some die, others thrive

Sugar industry: some die, others thrive

The sugar industry is experiencing stormy days as prices have dropped dramatically. However, some companies are thriving and plan to ‘swallow’ their rivals.



Phu Quoc welcomes increasing investment in urban development

Journalists live streaming court proceedings to be fined nearly US$1,500

Journalists may face a fine from VND7 million ($320) to VND30 million (over $1,400) if they record audio, video with audio of a court hearing and broadcast it live on cyberspace.

Man arrested for attempted murder of three-year-old boy, hiding him in freezer

Police in Ha Nam Province have arrested a 25-year-old man, for the attempted murder of a three-year-old boy after beating him unconscious and hiding him in a freezer.

Da Lat to build dossier for becoming UNESCO creative city of music

Da Lat city in the Central Highlands province of Lam Dong has been given the green light to build a dossier and plan serving the application to be part of UNESCO Creative Cities Network in the field of music.

Vietnam strives to conserve elephants

In Vietnam, elephants are classified as critically endangered in the Vietnam Red Book, and are included in the group with the highest conservation status, whose exploitation for commercial purposes is strictly prohibited. ​

VN photographer wins two prizes at One Eyeland Awards

Tran Viet Van, a journalist at Lao Dong (Labour) newspaper, claimed two prizes in the World’s Top 10 Portrait Photographers 2022 photo contest run by One Eyeland Awards 2022.

VN tennis players qualify for World Group II play-offs in 2023

The Vietnamese tennis team have been promoted to the World Group II play-offs in 2023 after enjoying a resounding 3-0 win over Syria in the 2022 Davis Cup Group III in the Asia/Oceania region.


NA Chairman approves financial support for pandemic-hit laborers

Removing bottlenecks to attract foreign visitors to Vietnam

The local tourism industry is currently devising ways to iron out snags in attracting foreign visitors to the country, as the number of foreign arrivals during the first half of the year was far below the set target.

Demand for logistics real estate increases sharply: Savills Vietnam

Vietnam’s logistics industry is developing strongly thanks to the growth of the e-commerce industry, according to Savills Vietnam.

Discover the exquisite rainbow rice noodles of Can Tho

Rainbow rice noodles, also known as five-coloured hủ tiếu, are a fun take on the traditional Vietnamese rice noodles and a must-try for every tourist to Can Tho City in the Mekong Delta.

A unique cave awaits explorers in Quang Binh Province

Va Cave in the core zone of the Phong Nha- Ke Bang National Park in Quang Binh Province, with its unique stalagmites and stalactites, is a natural beauty waiting to be discovered by explorers.

The most important 'economic corridors' for next 10-30 years

The national planning draft for 2021-2030 with a vision towards 2050 focuses on the formulation and development of economic corridors, dynamic zones, large cities and economic zones associated with the national infrastructure framework.

Artisans strive to keep traditional craft alive

Artisan Tran Van Ban is busy all day from early in the morning to the evening. He is carving out beautiful mooncake molds to serve people's demands for the Mid-Autumn Festival which is approaching in the next few weeks.

Goalkeeper Dang Van Lam returns home to join a V.league 1’s club

Goalkeeper Dang Van Lam is set for a return to V.League 1 after touching down in HCM City with his agent.