Hanoi (VNS/VNA) - Domestic sugar producers have beenfacing mounting pressure in competition with imported sugar in recentyears. 

According to the Vietnam Sugar and Sugarcane Association (VSSA),there has been a surge in supply since the beginning of 2023 while retailerswere sitting on a large stockpile left over from the previous year. It hasresulted in an excess in supply in the market, which was already saturated andhindered by low demand. 

The VSSA said in a recently released report that the country'sdomestic supply last year was estimated at 2.8 million tonnes, significantlyhigher than demand, which was estimated at 2.1-2.3 million tonnes. Theassociation expected the surplus to last for the foreseeable future as importedsugar continued to trickle in. 

For the long term, however, the association said there is a riskof market disruption should the surplus prevail, which will likely forcedomestic producers to cut prices, even lower than production costs to competeor reduce buying prices from sugarcane farmers. 

Industry experts said imported sugar often had the upper hand dueto lower prices. 

Ninh Thị Hue, a merchant at Tan Hiep Market in the southern cityof Bien Hoa, said her customers often prefer imported sugar while buying inlarge quantities. For example, her quotes for imported sugar were at around 20,000VND while domestic brands typically were at 24,000-25,000 VND per kilogramme. 

While being sold at a higher price point, there was not much of adifference in quality between imported and domestic brands. This has pushedmost consumers, who require large quantities, to go for importedsugar. 

Industry experts have long voiced their concern over a lackof strong domestic brands, as well as an inadequate distribution network toreach consumers. 

A number of domestic producers, however, had taken the initiativeto build their own network by collaborating with major retailers and e-commerceplatforms. 

"We are working with 122 distributors and running a networkof 53,000 retailers across the country, which accounts for around 80 per centof our sales last year," said Le Van Tien, sale-director of Thanh Thanh Cong-BienHoa JSC.

He said his firm has started expanding on popular e-commerceplatforms such as Lazada, Tiki, Sendo and Shoppee in recent years. 

He said Vietnamese consumers still have a preference for domesticsugar but it's crucial for producers to introduce new lines of products andbring down prices to compete against imported sugar./.