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Sweetness made more expensive by Mekong Delta sugar shortage
Sugar prices are on the rise as farmers have thrown the Mekong Delta into a sugar shortage by abandoning sugar cane for other crops.
Sugar mills in the Delta said that input shortages have forced them to suspend production for the past several months, resulting in a lack of sugar and higher prices.
Nguyen Thanh Long, Chairman of Can Tho Sugar Company in Hau Giang Province, said his firm ceased production in May shortly after the most recent sugar cane crop was harvested in September.
Sugar traders have taken advantage of the shortage and the fact that producers have already sold out of their most recent crop by setting high prices, Long said.
Other sugar companies said traders were hoarding sugar in preparation for the upcoming Tet Trung Thu, or Mid-Autumn Festival, which falls on October 3 this year, in which demand for super-sweet mooncakes, the holiday’s traditional treat, will skyrocket. The hoarding has worsened the price hike.
The retail price of sugar is now VND12,500-13,500 per kilogram, or VND2,000 more than last month, traders said.
Vo Thanh Dang, Chairman of the Vietnam Sugar Association said the country had imported 30,000 tons of sugar in the first half and would buy an additional 31,000 tons in the second half to help stabilize the market. The country imported 58,000 tons of sugar last year, according to the government figures.
But Dang said sugar prices would not settle until this September’s sugar cane harvest.
Long from the Can Tho company said that while the southern sugar sector was facing a shortage of materials, sugar volumes in the northern and central regions were relatively high. Northern and central dealers were now selling sugar to the south for local consumption, he said.
Shrinking sugar
The shortage can be traced to the loss of large swathes of sugar cane fields as many farmers seeking higher yields and profits switched to growing rice, corn and peanuts after the 2008 harvest.
Mekong Delta cane took up just 60,000 hectares during the harvest this year, down 10,000 hectares from the last harvest in 2008, official figures show.
In Hau Giang, sugar cane farmers have planted 12,979 hectares for the 2009 crop, 2,000 hectares less than the 2008 crop. Hau Giang is one the delta’s four largest producers of sugar cane, along with Tra Vinh, Ben Tre, and Soc Trang.
Global condition
Sugar supplies elsewhere in the world are expected to fall short of demand through September this year.
In late April, Paris-based company Sucres et Denrees forecast that the global sugar supply would fall short of demand for the 12 months ending September 2009, the first deficit in three years. The firm based the prediction on the deteriorating outlook for crops in India, China and Thailand.
The supply shortfall will be nine million tons in the period, before narrowing to two million tons the following year, the company said in an e-mailed report.
World production is forecast to drop to 154 million tons for the current marketing year, and rebound to 164 million tons next year, according to the report.
thanhnien, nld, bloomberg
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