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The bitterness of sugar cane
The southern province of Hau Giang now has 200,000 tonnes of sugar cane that need to be sold urgently, before the floods rush down. However, sugar plants have not set a floor price for purchasing sugar cane.
Ten sugar plants in the Cuu Long River Delta sat together on August 22 in Hau Giang province to discuss the collection of sugar cane materials in the 2008-2009 crop. It was not by chance Hau Giang province was chosen as the place for the meeting. The province now has 200,000 tonnes of unsold sugar cane being threatened by floods.
Please, take sugar cane before flood waters come down!
According to the Hau Giang Agriculture and Rural Development Department, Hau Giang is calling for sugar plants to purchase 200,000 tonnes of sugar cane in Phung Hiep district and Nga Bay town, promising to create the best conditions for the plants to collect materials.
The province now has 16,000 families growing sugar cane, or 20% of total farmers. They want sugar plants to collect sugar cane at VND490/kg, a price which would ensure the profit of 40% for farmers (production cost: VND350/kg + 40% profit). However, sugar plants say that they do not want to purchase sugar cane now as the sugar concentration in sugar cane remains low.
With the profit of 40%, farmers would get VND14mil per hectare, overly low profit if noting that it took nearly one year to get one crop. However, no sugar plant has confirmed a floor price for sugar cane, because they said they still need to consider the outlets for the products.
Three sugar plants in Hau Giang will be operational as of September 15, while other plants in late September 2008.
“Sugar plants have to collect sugar cane at the floor price of VND500/kg, and they need to sign contracts on sugar cane purchases with farmers,” said Le Xuan, Head of the Processing -Trade, Agriculture – Forestry – Aquaculture and Salt Agency. However, the sugar cane prices will still depend on many other factors. In many cases, sugar cane prices are decided by wholesale merchants instead of sugar plants.
Enterprises need cooperation
“Sugar plants, please don’t fight each other,” the director of a sugar plant said, and he has reasons to say so.
The 10 operational sugar plants have the capacity of 21,500 tonnes of sugar cane a day. In previous years, the plants were always fastidious about the quality of sugar cane in Phung Hiep – Nga Bay, but later scrambled to purchase materials.
However, analysts believe that sugar plants will not have to scramble for materials this year, because the plants still have big stocks, while the sugar price has been decreasing and illegal imports have been abundant.
Sugar plants in the Cuu Long River Delta have forecast that the wholesale price of RS sugar will hover around VND8,000/kg until the end of September 2008, which proves to be low compared to that of regional plants. Meanwhile, 400-500 tonnes of illegal imports have been arriving a day through the southwestern border.
Domestic sugar plants are now under heavy pressure to ‘liberalise’ their stocks in the fierce competition with illegal imports.
“What sugar plants need to do now is to join forces to fight illegal sugar imports,” said Bui Thi Quy, the General Director of Van Phat Sugar Company.
Meanwhile, Le Van Dong, General Director of the Sugar and Sugar Cane Corporation No 2, has suggested that sugar plants pay money to the taskforce on fighting illegal imports in order to support the fight.
VNN
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