“We need to import sugar right now, or it will be too late,” claimed Doan Xuan Hoa, Deputy Director of the Department of Agriculture, Forestry and Fishery Products Processing and Salt Industry under MARD, in an interview with Nong Nghiep Vietnam newspaper.
The world sugar price has unexpectedly soared after decreasing significantly in February and March 2010. The 2009 price once jumped to $900 per ton and the world worried about a sugar shortage. After that, the price fell to $400 per ton at the end of the first quarter of 2010.
Now the sugar price has soared again, hitting nearly $800 per ton as the world supply has dropped. The last crop’s output dropped by five million tons, prompting big sugar consumers like China, the US and Thailand to import sugar for storage. All these factors have pushed prices up, which are expected to exceed the $800 per ton threshold.
The latest news from MARD and MOIT showed that, by July 6, the inventory at sugar refineries and companies had reached 205,400 tons, which is 55,000 tons higher than 2009. This large volume should remove any worries about a domestic shortage.
Hoa noted that this stockpile has been sold already. Big sugar refineries regularly sell large quantities to dairy, confectionary and drink producers like Vinamilk, Pepsi, Kinh Do or Coca-Cola.
In reality, Vietnam has no more sugar to sell.
Hoa denied that sugar prices have been rising sharply over the last few days because of speculation. According to Hoa, domestic sugar refineries need to sell sugar to pay farmers and bank debts. Meanwhile, sugar import companies need to sell sugar to take back capital. They were not foolish enough to store sugar while the price plummeted several months ago.
“I think that some big guys in the north and the south, who have huge capital, can store for speculation. But I don’t think that there are many,” Hoa mused.
Addiing that supply and demand is now seriously imbalanced, Hoa explained that sugar demand will rise fast, especially as the mid-autumn festival and 2011 Tet are coming and firms need sugar to make traditional products.
On average, Vietnam consumes 80-100 tons of sugar a day, and the figure could be even higher on peak days. Meanwhile, the retail price has surged to 20,000 dong per kilo.
Regarding the cry to import 150,000 tons of sugar as suggested by MARD, Hoa revealed that the quota to import 100,000 tons will be allocated immediately to enterprises, while the other 50,000 tons will be for provisioning. Of this, 75,000 tons will be for finished products, while the remaining 25,000 tons will be imported for the Bien Hoa Sugar Plant to refine.