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Sugar plants thirsty for sugar cane
Since the end of March 2009, six sugar plants in the Cuu Long River Delta have been speeding up the collection of materials, pushing the sugar cane prices up to the new record levels at VND 620-670/kg (10 CCS sugar cane).
According to Dr. Ha Huu Phai, Secretary General of the Sugar and Sugar Cane Association, since mid-March, 20 out of 40 sugar plants across the country have to finish production soon because of the lack of materials. In general, the production year finishes in early May, while it finished two weeks earlier this year.
Sugar cane prices gain record heights
In the 2007-2008 crop, the sugar cane prices at which sugar plants collected from farmers were just VND 350-400/kg. In the 2008-2009 crop, the Sugar and Sugar Cane Association suggested that plants should purchase at VND 470-500/kg at the lowest.
However, the sugar cane prices have turned out to be much higher than the suggested levels. The sugar cane prices in the Cuu Long River Delta have climbed to the highest levels ever, two times higher than the previous crop.
The Cuu Long River Delta has 10 sugar plants with very big capacity of between 1,000-2,500 tons a day, while other plants have been trying to upgrade the capacity. Meanwhile, the total sugar cane output in the region is less than half a million tons. That explains why in order to get enough materials, sugar plants have been scrambling to collect materials, pushing the sugar cane prices up.
Currently, sugar cane is being grown mostly in localities of Tra Vinh province (1,000 hectares), Cu Lao Dung district in Soc Trang province (3,000 hectares) and Long My district in Hau Giang province.
According to the Sugar and Sugar Cane Association, there are 40 operational sugar plants which have the capacity of 12.3 million tons of sugar cane in total. It was planned that the 2008-2009 crop sugar productivity would be 1.28 million tons. However, the total sugar cane output is just 10 million or 2.3mil tons lower than the previous crop.
Due to the lack of sugar cane materials, the sugar output is expected to see a decrease of 198,000 tons in comparison with the plan. It is expected that the production year will finish by mid-April at the latest.
In July 2008, market surveyors predicted that the total sugar output in 2008-2009 around the globe would be 167 million tons. However, the actual productivity proves to be lower at only 160.9 million tons, down by 6.1 million tons. Forecasts showed that the world is short by 3.8 million tons of sugar in 2008-2009.
The sale prices of domestic sugar plants have increased by between VND 1,500-1,800/kg over the same period of 2008, now staying at VND 9,000/kg. Despite the high sugar cane prices, all sugar plants can make profit as the sugar cane at the end of the crop has high quality (10-12 CCS).
Farmers still unhappy
The sugar cane price has increased by two folds over the previous crop, while the prices of fertilizer and other agricultural materials have decreased, which has brought an easier life to farmers.
It is estimated that with the average yield of between 55-60 tons of sugar cane per hectare and the sale price of VND 600/kg, farmers will get the profit of between VND 15-20 million per hectare. However, farmers complained that in fact, they have not received a profit from the price increases because they sold all the sugar cane to merchants before at lower prices.
In Ben Luc district in Long An province, sugar cane chopping workers have collided with petty merchants to push the sugar cane prices down. In general, the prices at which merchants collect sugar cane from farmers are 30% lower than the prices set by sugar plants. If farmers do not sell sugar cane to petty merchants, workers will not chop sugar cane in their fields, leaving the fields to die.
To date, sugar plants and farmers still have not got a close connection. Sugar plants have not had reasonable projects on developing the sugar cane growing areas. Troubles have always existed between sugar plants and farmers. Plants believe that farmers violate laws, while farmers think that plants undervalue their sugar cane.
VietNamNet/TBKTVN
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