Hanoi (VNS/VNA)- The domestic sugar industry should restructure all stages of its productionprocess towards diversifying products to improve competitiveness, according tothe Ministry of Agriculture and Rural Development (MARD).

At a meeting between leaders of the MARD and theVietnam Sugarcane and Sugar Association (VSSA) in Hanoi this week, Minister of Agricultureand Rural Development Nguyen Xuan Cuong said that to improve thecompetitiveness of the sugar industry, "production cost must be reduced atall stages."

“Besides that, the association and businessesneed to pay special attention to mechanisation, irrigation, organic farming,cooperation models in production, new cooperative models and diversification ofproducts made from sugarcane products,” Cuong said.

“Those solutions would make products with highquality and low production cost for the industry’s sustainable development inthe future.”

The ministry will accompany the association andenterprises to promote the production of sugarcane varieties to meet demand onthe varieties of farmers, thereby raising Vietnam's sugarcane productivity to90-100 tonnes from 50-60 tonnes at present, he said.

The MARD, the Ministry of Science and Technologyand the VSSA are likely to cooperate in developing quality standards andregulations for the sugar industry.

VSSA Chairman Pham Quoc Doanh said the sugarindustry, especially sugar mills, are facing difficulties due to the lowestprice of sugar in the past 20 years. Climate change and tariffs under the ASEANTrade in Goods Agreement (ATIGA) effective from January 1, 2020 also createpressures on the industry, he said.

Therefore, the VSSA has proposed to theGovernment and ministries a series of solutions to overcome the existingdifficulties, Doanh said.

It is necessary to focus on restructuring thesugar industry to improve its ability in competitiveness and market integrationby 2030, he added, pointing out a major task is restructure of materialproduction to reduce price and production costs.

In addition, solutions need to pay attention torestructuring variety production, aiming at supplying all sugarcane varietieswith high quality and productivity for farmers after 2020.

That will stop an existing situation thatfarmers themselves keep sugarcane to be varieties in the next crop, makingreduce quality and productivity year by year, according to the association.

The industry should use innovate farmingmeasures, production organisation, management of quality and price andtechnology for production.

The VSSA has proposed the Government permit onlythe import of raw sugar for refineries and have mechanism of granting importlicences for monitoring the volume.

The association has asked the State to stop bidson the right to use duty quota to import sugar this year.

It has also suggested the Ministry of Industryand Trade find solutions to deal with the elimination of tariffs on sugarproducts under ATIGA from 2020. The ministry should propose defense oranti-dumping measures for sugar imports in case the tariff elimination createsnegative impacts on domestic production.

Meanwhile, the Ministry of Finance was asked topropose to the National Assembly adjustment and supplementation of specialconsumption tax at 12 per cent on imported High-Fructose CornSyrup (HFCS), or liquid sugar extracted from corn, damaging thedomestic sugar industry.

Vietnam has 36 sugar factories with a totalcapacity of 150,000 tonnes of sugarcane per day, an increase of 12.7 timescompared to 1995. The total sugarcane area in the country is about 300,000 ha,an increase of about 10 times compared to 1995.

Every year, the industry produced about onaverage 1.5 million tonnes of sugar, earning about 300 trillion VND, meeting the domestic demand andstabilising price on the domestic market.

However, according to VSSA, the 2018-19sugarcane crop is the third consecutive year under impacts from weatherclimate, prices, domestic and international markets and losses of manyfactories and companies in the 2017-18 crop.

All 36 sugar-processing factories have enteredthe production season this year and until March 15, they have produced 750,000tonnes of sugar. Meanwhile, sugar price is still low of 10,500 VND per kilo ofwhite refined sugar due to big inventory from the last crop.

Meanwhile, liquid sugar imports have continuedto increase to 140,000 tonnes in 2018 from 46,000 tonnes in 2014.

In the 2018-19 crop, output reached about 14million tonnes of sugarcane, processing about 1.3 million tonnes of sugar,lower than from the previous crop.

Those figures are expected to fall 5 per cent to13 million tonnes of sugarcane and 1.25 million tonnes in the 2019-20 crop againstthe previous crop.-VNS/VNA