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Sugar mills cut wholesale prices
Several sugar processing factories have reduced the wholesale price of sugar to promote consumption, according to the Ministry of Agriculture and Rural Development (MARD) said.
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| Sugarcane being transported to Phan Rang Sugar and Surgacane Joint stock Company in Ninh Thuan Province. Many sugar processing mills have reduced the wholesale price of sugar. |
The ministry's Inform-ation and Statistics Centre reported by mid-January, all 38 sugar factories nation-wide had aimed for a combined production to reach a total output of 461,000 tonnes for the year, 48,000 tonnes higher than last year.
Meanwhile, factory stockpiles by mid-January had risen to a year-on-year increase of 5,600 tonnes to stand at 151,000 tonnes.
The wholesale price of white sugar fell by VND1 million (US$48) per tonne to VND16.3-17.7 million against last month's wholesale price.
Former general secret-ary of the Viet Nam Sugar and Sugarcane Association Ha Huu Phai said sugar factories in the north could profit with a wholesale price of more than VND16 million per tonne, but in the south factories would face difficulty if they were forced to sell sugar at the same price.
Factories in the north could purchase sugarcane at VND900,000-VND1 milion per tonne, while southern factories must buy at VND1-1.2 million per tonne of sugarcane.
Ouput of sugarcane in the northern provinces had beenalways higher than in the southern provinces, however many factories must sell sugar at low prices to increase capital for production and payment of raw materials.
Sugar factories had always faced a lack of capital for production, Phai said.
The ministry estimated the industry would have a year-on-year increase in sugar output of 250,000 tonnes of sugar to reach 1.4 million tonnes for the 2011-12 crop.
Domestic sugar consumption is expected to be 1.3 million tonnes for this year, leaving the domestic market with a surplus of 200,000 tonnes, including 100,000 tonnes in stock from last year, 70,000 tonnes of imported sugar under Viet Nam's commitments entering to WTO and 30,000 tonnes of imported sugar through border gates.
The association proposed that the Ministry of Industry and Trade create favourable conditions for enterprises to export sugar to ensure the price would not fall dramatically.
Phai said if the wholesale price of sugar went too low, factories would not be able to ensure profits for farmers, who may instead plant trees, which could create a lack of materials for sugar factories.
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