Local firms are racing for sugar exports to China on the heels of huge sugar stockpiles in the domestic market.
“China faces a shortfall of two million tonnes of sugar. Local firms can make use of the opportunity to lessen their stockpile volumes,” said deputy general director of Quang Ngai Sugar Joint Stock Company Cao Minh Tuan.
Tuan said there was an unfair competition between local firms racing to export sugar to China.
“Our company came to China for a market survey after getting to know about sugar shortages in China and exported about 10,000 tonnes of sugar to the market. However, some other local firms offered lower prices to lure customers. The Chinese partners then compelled local firms to sell products at lower prices,” Tuan said.
Many sugar firms blame the Vietnam Sugarcane and Sugar Association’s current poor information system.
“Our local firms want to know more about Chinese market’s sugar demand and more relevant information, but no government agencies could respond us. How can we properly orientate our export plans with such poor sources of information,” said the director of a sugar factory.
Local firms vying for sugar export to China made industry insiders give out a warning about possible sugar shortage in the domestic market by the year end.
The shortfall might occur in the third quarter of this year unless proper measures were taken to control sugar exports to China, said Bien Hoa Sugar Joint Stock Company chairwoman Pham Thi Sum.
Sum said around 2,000-3,000 tonnes of sugar were exported to China each day.
In this context, Tuan suggested flexibly applying sugar export policies to take advantage of favourable world market pricing terms and help local firms disentangle.
Of the same mind, Bien Hoa sugar company general director Nguyen Van Loc recommended the government apply the Indian model which green-lighted businesses to export sugar, but they must import similar sugar volumes in a certain period of time.
Exports to China are considered a situational remedy to local sugar firms in the present context. “Exports to China are fragile and may stop at any time,” Tuan said.
Loc attributed huge sugar stockpile, over 500,000 tonnes as of April 15, 2011 according to Ministry of Industry and Trade figures, to the nation’s sugar sector’s poor performance.
The Ministry of Agriculture and Rural Development urged sugar firms to carefully select raw materials to ensure sugar quality. Firms were also required to set proper pricing terms which can harmoniously balance the firm, the farmer and consumer interests.