Vietnam to Seek Efficiently Restructure Domestic Sugar Industry

The Vietnamese sugar industry will have find the greater development opportunities if it can re-organise itself more effectively despite it is reported that the sugar and sugarcane industry are facing numerous difficulties, Especially, the issue with removed the tariff rate quota on sugar imports under the ASEAN Trade in Goods Agreement (ATIGA) on this January, 2020.

According to Prime Minister Nguyen Xuan Phuc, speaking at a meeting, rejecting the demands, urged local businesses to compete fairly with other countries in the region. “The sugar industry needs to restructure to have higher productivity amid global integration.” He added that factories with outdated technologies and low productivity should be replaced with more advanced ones.

On January this year, previously, Viet Nam removed the tariff rate quota on sugar imports under the ASEAN Trade in Goods Agreement (ATIGA). Many countries around the world have also provided price subsidies for this commodity, so sugar import prices are very cheap. Meanwhile, Vietnamese businesses almost do not have any markets to export sugar to due to other countries’ protectionist policies, according to the ministry.

The country should have scrapped the 5 percent import tariff on sugar on January, 2018, under the ASEAN Trade in Goods Agreement, but negotiated with other member countries to delay it until January 1 this year following representations by the Vietnam Sugarcane and Sugar Association (VSSA). The VSSA earlier this year again sought a delay to give time for Vietnamese firms to improve its competitiveness and claiming the cost of manufacturing a ton of sugar in Vietnam is up to VND200,000 ($8.6) higher than in Thailand.

Nguyen Xuan Phuc, the Prime Minister of Vietnam

An estimated 35,000 farmers in Vietnam grow sugarcane, but in the last two years production in most localities has been dwindling on growing competition due to lower regional prices, according to the Ministry of Agriculture and Rural Development.

The sector needed to be well aware of these challenges to align production with the market, he said, believing that development for the sugar sector was still ahead if it can carry out effective re-organisation. This year, the world’s sugar industry might contract while sugar demand and prices might increase. This was an opportunity for the Vietnamese sector to restructure, the PM noted.

He suggested domestic businesses find development chances in by-products to produce electricity, plywood, ethanol and fertiliser to create more added value. The Government leader stressed the sugar industry must be ready to compete, asking businesses to restructure and accept being eliminated if they perform poorly. The State would have support measures, but it wouldn’t subsidise the sugar industry. The sector must compete fairly amid international integration

At the meeting, he agreed on the Viet Nam Sugarcane and Sugar Association’s proposal to assign agencies to carry out trade remedies that don’t run counter to international rules to fight the dumping of sugar products while enhancing the fight against sugar smuggling and trade fraud, the PM said.

Therefore, Viet Nam government will try to support the local sugar producers including domestic sugar industry by possible measure for keeping its competitiveness amid lower regional prices and the issue of the country drops tariffs on imported sugar from ASEAN under the ASEAN Trade in Goods Agreement (ATIGA) in this year.

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