The Ministry of Finance has decided to sharply increase import tax onsugar from January next year as local supplies are forecast to exceeddemand.

The import tax on raw sugar would increaseto 25 percent from 15 percent and on refined sugar to 40 percent from 15percent, the ministry said.

The nation's 2012-13crop was expected to yield around 1.5 million tonnes of sugar, roughly100,000-200,000 tonnes higher than local demand.

Inthe domestic market, the sugar price was expected to fall by 1,000VNDper kg over September to 20,000 VND per kg while the Ministry ofFinance's Price Control Department forecast it would continue to fall.

In April last year, the ministry had to cut theimport taxes on raw and refined sugar to 15 percent from 25 and 40percent, because of concern that surging prices due to the increaseddemand and short supply would push inflation. The price was 24,000 VNDbefore Tet last year with the local crop producing only 1 million tonnesof sugar.

Minister of Industry and Trade Vu HuyHoang said Vietnam will import 100,000 tonnes of sugar this yearbecause of the country's WTO commitment.

Theministry accepted an import quota of 70,000 tonnes in August, addingthat it would work closely with the Ministry of Agriculture and RuralDevelopment and the Vietnam Sugar Association to decide the mostsuitable time to grant sugar import quotas to avoid their impact ondomestic production. VNA