Sugarcane farmers have been forced to reduce their farming areas due to difficulties from imported and smuggled sugar. (Photo: VNA)Hanoi (VNS/VNA) - The sugar industry is facing many challenges and unfaircompetition from imported and smuggled goods, experts told a conference held inHanoi on December 1.
Also discussed were possible solutions, such as applying trade remedies andbuilding chain links to remove the “bottlenecks” for the local sugar industry.
After many years of maintaining a protection policy, Vietnam began to implementits commitments under the ASEAN Trade in Goods Agreement (ATIGA) from thebeginning of the year, by not limiting the sugar imported from ASEAN countriesand tariffs being cut to zero percent.
Since the removal of tariff quotas, the total amount of sugarcane imported intoVietnam has increased rapidly, reaching approximately 1.3 million tonnes in thefirst 10 months of 2020. In addition, the price of imported sugar is also verylow, causing many difficulties for sugar enterprises as well as farmers.
Faced with cheap imported sugar, Vietnam’s domestic sugar price has fallen to avery low level, leading to low sugarcane prices.
This, the conference was told, was one of the reasons sugarcane farmers havefallen into debt.
Speaking at the conference, farmer Tran Thi Yen in Phu Yen province said sugarcaneno longer generated great economic profits. She said farmers could not earnprofits, or even lose capital, having to reduce their sugarcane growing area.Many sugarcane growers had to leave their land to work as hired labourers.
Sharing the ideas, Do Van Thao, another sugarcane farmer from Kon Tum provincesaid although the company had introduced a number of measures to supportfarmers, the price was too low, putting great pressure on the industry.
The country now has 29 sugar plants in 2019-20 crop season, 11 less than theprevious season. In the 2020-21, it is forecast to be a difficult year for thelocal sugar industry, especially in the complicated situation of the COVID-19pandemic.
It is expected that four more sugar factories including Son Duong, Nong Cong, VanPhat and Pho Phong continue to close due to the lack of raw materials andinefficient operations.
Nguyen Van Loc, secretary general of the Vietnam Sugar and SugarcaneAssociation (VSSA) said they have sufficient databases available to identifyimported sugar originating from Thailand as dumped and subsidised for dumpingin foreign markets (according to WTO trade rules). In addition, it also hasclear evidence that dumped imported sugar causes significant damages to thedomestic industry.
“According to our data, the average export price of raw and refined sugar isonly 334 USD per tonne,” he added.
“The above exported sugar price is clearly not only much higher than the priceof sugar sold in the Thai market, but also lower than the cost of sugarcane toproduce sugar. This further highlights the dumping nature of Thai sugar when itenters the Vietnamese market.”
Tran Ngoc Hieu, general director of Soc Trang Sugar Company suggested the Governmentand ministries drastically implement the fight against smuggling,counterfeiting and anti-trade fraud. The Ministry of Industry and Trade (MoIT)needs to investigate and soon apply anti-dumping measures to sugar productsfrom other countries, especially from Thailand to create a fair competition,thus facilitating business buying sugarcane prices at higher prices.
“Commercial banks should create conditions for sugar cane growing andproduction companies to mortgage loans but only a part of their assets, withoutinterest for investment loans investing into seeds, raw materials and labour,”he said.
The Government has issued many documents directing the implementation ofmeasures to remove difficulties for the sugar industry. Most recently, on July14, 2020, the Government issued Directive No 28/CT-TTg on the implementation ofsolutions to develop Vietnam’s sugar industry.
Le Trieu Dung, MoIT’s Director of the Department of Trade Defence said thatdomestic sugar industry had provided information and evidence that sugar caneproducts imported from Thailand were being dumped into Vietnam and the ThaiGovernment had been maintaining a number of subsidy policies for sugarcanegrowing activities and their sugar industry.
On the basis of the request documents of enterprises representing the industry,in September 2020, the ministry issued Decision No 2466/QD-BCT on theinvestigation and application of anti-dumping and countervailing measures forsome sugarcane products originating from Thailand.
In June 2020, the ministry also issued Decision No1715/QD-BCT on theinvestigation and application of anti-dumping measures on some liquid sugarproducts extracted from corn starch (also known as HFCS) originating from Chinaand the Republic of Korea.
“Currently, both cases are in the process of investigation,” Dung said.
“The department will conduct an investigation in accordance with the Law onForeign Trade Management and related legal documents in order to establish afair competition environment in the context of international economicintegration, protecting the legitimate rights and interests of the domesticmanufacturing industry from unfair competition.”
According to Tran Thanh Hai, deputy head of the ministry’s Department ofImport-Export when the investigation results proving the violation of importedsugar are available, tools can be applied to protect the legitimate rights andinterests of sugar cane farmers.
He added: “However, the current situation of Vietnam’s sugar industry maypartly because the transformation of the sugar industry in the integrationprocess has not been improved.
“In fact, not only the sugar industry, but also the steel, automobile andlivestock industries faced difficulties. As for the automobile industry, threeyears ago, we also had to open the industry to zero import tax rate.
“Through difficult times, Vietnamese brands have been formed. Therefore, theassociation, innovation, and determination of businesses themselves will be animportant solution to help the sugar industry overcome this integration wave.”/.
VNA
