Radical reforms including mergers and introduction of new technologiesare needed to help the domestic sugar industry sustain its growth as thecountry deepens its international integration.
Experts and officials have pointed out that Vietnam is poised to reduce import tariffs sharply under WTO and ASEAN commitments.
Vietnammust grant an import quota of 81,000 tonnes of sugar to WTO membercountries this year at preferential tariffs of 25 percent and 40 percentfor raw sugar and white sugar products, respectively. This is a steepfall from normal tariffs of 80 percent and 85 percent.
The import quota has been raised by five percent each year from 50,000 tonnes in 2007, when the country joined the WTO.
Also,recently, under ASEAN commitments, Vietnam has offered preferentialtariffs of 5 percent to member nations for white and raw sugar.
Upcoming free trade agreements are likely to make it even tougher for local businesses, the experts say.
Atpresent, the local sugar industry is hampered by poor cultivationtechniques; a lack of high-yielding sugarcane varieties; and an absenceof renovation, Deputy Minister of Industry and Trade Nguyen Cam Tu saidrecently.
He was responding to the media regarding the recentimport of sugar produced by the Hoang Anh Gia Lai group's factory inLaos's Attapeu province from the 2013-14 crop.
Besides, factorieswere not keen to support farmers when the price of sugar fluctuated inthe country. Therefore, farmers were willing to cut down sugar canes togrow another plants to make profit.
The way the local sugarindustry goes about its business is also problematic. Sugar mills do notmaintain high quality, rely on middlemen to sell their products, andare yet to improve production efficiency to become more competitive, Tusaid.
Low demand, large stockpiles and illegal imports are otherobstacles facing the industry. To overcome these problems and have thedomestic industry hold its own against regional and internationalcompetitors, weaker firms should merge with bigger ones, as has happenedin the banking sector, he said.
International integration is a"correct policy of the Party and State" that poses both challenges andopportunities, and the only way to deal effectively with these is forall stakeholders to boost reforms, he added.
The Association ofSugarcane and Sugar Association (ASSA) has also mapped out severalmeasures that focus in particular on sugarcane cultivation, seeking toredress a value imbalance between sugarcane farmers and sugar mills.
ASSAsaid last week that the plan for sugarcane cultivation, including landallocation, had to be revised. The cultivation area should be largeenough to meet the raw material demand of sugar mills that have aminimum output of 4,000-5,000 tonnes of sugarcane. Large sugarcanefields are also needed to apply new cultivation techniques.
Mergingand removing small-scale factories for reinvestment and strengtheningpolicy support for farmers, improving transport infrastructure andbuilding better irrigation facilities are other urgent measures neededto improve the current situation, ASSA said.
There are more than310,000 hectares under sugarcane cultivation in the country at present.In the 2013-2014 crop, sugarcane production reached 1.6 million tones,with productivity rising to a record 5.47 tonnes a hectare.-VNA
Experts and officials have pointed out that Vietnam is poised to reduce import tariffs sharply under WTO and ASEAN commitments.
Vietnammust grant an import quota of 81,000 tonnes of sugar to WTO membercountries this year at preferential tariffs of 25 percent and 40 percentfor raw sugar and white sugar products, respectively. This is a steepfall from normal tariffs of 80 percent and 85 percent.
The import quota has been raised by five percent each year from 50,000 tonnes in 2007, when the country joined the WTO.
Also,recently, under ASEAN commitments, Vietnam has offered preferentialtariffs of 5 percent to member nations for white and raw sugar.
Upcoming free trade agreements are likely to make it even tougher for local businesses, the experts say.
Atpresent, the local sugar industry is hampered by poor cultivationtechniques; a lack of high-yielding sugarcane varieties; and an absenceof renovation, Deputy Minister of Industry and Trade Nguyen Cam Tu saidrecently.
He was responding to the media regarding the recentimport of sugar produced by the Hoang Anh Gia Lai group's factory inLaos's Attapeu province from the 2013-14 crop.
Besides, factorieswere not keen to support farmers when the price of sugar fluctuated inthe country. Therefore, farmers were willing to cut down sugar canes togrow another plants to make profit.
The way the local sugarindustry goes about its business is also problematic. Sugar mills do notmaintain high quality, rely on middlemen to sell their products, andare yet to improve production efficiency to become more competitive, Tusaid.
Low demand, large stockpiles and illegal imports are otherobstacles facing the industry. To overcome these problems and have thedomestic industry hold its own against regional and internationalcompetitors, weaker firms should merge with bigger ones, as has happenedin the banking sector, he said.
International integration is a"correct policy of the Party and State" that poses both challenges andopportunities, and the only way to deal effectively with these is forall stakeholders to boost reforms, he added.
The Association ofSugarcane and Sugar Association (ASSA) has also mapped out severalmeasures that focus in particular on sugarcane cultivation, seeking toredress a value imbalance between sugarcane farmers and sugar mills.
ASSAsaid last week that the plan for sugarcane cultivation, including landallocation, had to be revised. The cultivation area should be largeenough to meet the raw material demand of sugar mills that have aminimum output of 4,000-5,000 tonnes of sugarcane. Large sugarcanefields are also needed to apply new cultivation techniques.
Mergingand removing small-scale factories for reinvestment and strengtheningpolicy support for farmers, improving transport infrastructure andbuilding better irrigation facilities are other urgent measures neededto improve the current situation, ASSA said.
There are more than310,000 hectares under sugarcane cultivation in the country at present.In the 2013-2014 crop, sugarcane production reached 1.6 million tones,with productivity rising to a record 5.47 tonnes a hectare.-VNA
