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Retailers sit on sugar import permits
The Ministry of Industry and Trade has granted quotas to import 200,000 tonnes of sugar with an aim to stabilize the domestic market. However, the enterprises that received the quotas have not imported sugar yet, and the domestic price remains sky high.
Doan Xuan Hoa, a senior official of the Ministry of Agriculture and Rural Development, told Tien Phong newspaper that import permits have been issued for another 50,000 tons of refined sugar has been granted, bringing the total in the year so far to 200,000 tons, or double the amount of sugar imports allowed in 2009.
Hoa commented that the enterprises that were granted quotas ought to have imported sugar as soon as they had them in hand, but they have not done so.
“We have asked the Ministry of Industry and Trade to take a look at this,” Hoa said.
The chairman of the Vietnam Sugar and Sugar Cane Association, Vo Thanh Dang, explains that world sugar prices are so volatile that no company is foolish enough to import sugar at this moment.
Dang said that the current (2009-2010) crop failed in many countries, so that supply has fallen far short of demand. The world sugar price is very high - $680-730 per ton.
Dang added that any company that imports refined sugar at this moment must sell it for 18,000 or 19,000 dong per kilogram, but the domestic price is stuck in the 16,000-18,000 dong per kilo range. “Companies will not import sugar while the domestic price is lower than the import price,” he said flatly.
Current rules give enterprises the right to decide whether or not to import sugar when they are grated quotas.
Dang proposed that the quota system be changed. Import permits ought to have a limited term and, he said, companies should be allowed to bid collectively and required to take responsibility if they do not import sugar as promised.
“In long term,” Dang added, “I don’t think we should keep sugar import quota scheme. We can produce sugar all the sugar we need domestically. Why should we spend $200 million a year to import sugar while farmers do not have jobs,” Dang said.
The Director of the Domestic Market Policies Department of the Ministry of Industry and Trade, Hoang Tho Xuan, has threatened severe punishment for companies that request quotas but do not import sugar, or for enterprises which import sugar but do not sell sugar at the price to which they have committed.
I do not agree with the Sugar Association. They do not want us to allow sugar imports because they want to control prices themselves.
I agree that it’s possible for domestic sugar refineries to sell sugar at prices closer to the world’s prices. In fact, however, they are selling above the world price.
The Association exaggerates the world price – it’s currently only 16,000 dong per kilo.
Deputy Minister of Agriculture and Rural Development Diep Kinh Tan
VietNamNet, TP
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