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Sugar scarce, prices double, moon cakes will surely follow
Sugar prices have spurted in the last month to 16,000-17,000 dong per kilogram, twice the January level.
Supermarkets and retail shops have been repricing the sugar remaining on their shelves continuously since the beginning of August.
In the first week of August, refined sugar from Bien Hoa Sugar Company sold at 14,500 dong per kilo at Hapro supermarket. Five days later, the price was 16,000 dong.
An officer at Hapro said that the sugar price has been updated daily by the producer. VietNamNet reporters did a quick survey of the Ngoc Ha, Thanh Cong and Kham Thien areas of Hanoi and some local retail shops and confirmed that the Hapro prices reflect a general trend.
Vu Thi Hoa, a merchant at Ngoc Ha Market, related that “yellow sugar, which was 13,000 dong per kilo last week, has jumped to 14,000 dong, while white sugar has increased from 12,000 dong to 16,000 dong per kilo.”
The chairman of Lam Son Sugar Company, Le Van Tam, predicts that the sugar price will peak around October. “The shortage will persist until the next crop. The wholesale sugar price may reach 15,000 dong/kg,” Tam added. “The factories do not have much to sell.”
Autumn festival cake prices will rise as well
Sugar price escalations have not much affected consumers, because their monthly sugar consumption is not large. However, this has become a hot issue for confectionary manufacturers, especially autumn festival “moon cake” producers.
The fragrant ten centimeter-across moon cakes, filled with sweets and nuts, are in great demand as gifts during the annual ‘mid-autumn festival’ that all Vietnam will celebrate this year on October 3.
Owners say that though the festival cake season has just begun and producers have not set prices yet, they are sure that the cake prices will escalate in tandem with sugar price increases.
Nghia, the owner of a moon cake workshop, complains that she anticipated the sugar price increase, but had no extra space to buy and store it.
She said that she bought sugar last week at 14,000 dong per kilo. Sugar prices are still increasing, so she speculates that individual cake prices will increase by several thousand dong.
Big confectionary producers like Hai Ha and Kinh Do have also warned that cake prices will be higher than 2008 due to the higher prices of ingredients.
Meanwhile, the sugar company head, Tam, is sure that prices will decline when the next crop reaches the market in October and November, which will bring the price down to 12,000 dong per kilo. For the time being, Tam recommends, the State should encourage sugar imports to ward off a serious sugar shortage during the mid-autumn festival season.
No reserves mean price hikes
In fact, government agencies warned of a sugar shortage earlier this year.
A lot of sugar plants have stopped production since April because of the lack of sugar cane. Farmers chopped down sugar cane to grow other types of plants that can bring higher profits. Forty sugar plants reportedly had closed their doors by June, two months earlier than in previous years. As the result, the sugar output this year dropped to 909,000 tons, down by 240,000-260,000 tons.
Local enterprises have asked the Ministry of Industry and Trade to allow imports of 115,000 tons of sugar to stabilize the market. While the ministry is still thinking about the proposal, illegal sugar imports have been flowing into the market.
A Ministry of Agriculture and Rural Development report showed that in July, illegal imports across An Giang province [i.e., from Cambodia] dominated the entire southwest market and a part of the HCM City market, reaching 300 tons per day. In northern Vietnam, some 100 tons cross through the Cau Treo border point every day.
Many feel that market regulations based on import quotas and high taxes (an 80 percent levy on raw sugar and 100 percent on refined white sugar) are not reasonable.
Tam calls the lack of a sugar reserve “a mistake. Neighboring countries like Thailand, China, India and Indonesia all have sugar reserves,” he explains, “while Vietnam does not. Therefore, we cannot stabilize the market even when we have anticipated the problem.”
Pham Hung
vietnamnet
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