Sweet deal for Vietnam’s sugar industry

A new MoIT circular applies to traders who use sugar for production, traders who use raw sugar to produce refined sugar and individuals/organizations involved in importing sugar under the 2019 quota.

The MoIT will set up a council to run the auction. When auction results are available, the MoIT will issue a written notice of the right to use sugar import quotas to the winning trader who will use this notice for customs clearance in accordance with the Customs Law.

In fact, under the ASEAN Trade in Goods Agreement (ATIGA), Vietnam was required to abolish tariff quotas on imported sugar from ASEAN countries from January 1, 2018. However, at the request of the sugar industry, the MoIT asked the government to postpone the implementation of ATIGA commitments for two years to allow sugar companies and farmers to adapt to this unprecedented implementation of international integration commitments.

According to the Vietnam Sugarcane Association, in the early months of this year, the domestic sugar industry faced many difficulties due to fake sugar and smuggled sugar. To improve the competitiveness of sugarcane enterprises, the MoIT reported to the prime minister that it agreed to temporarily suspend the removal of commitments on sugar import quotas and continue to auction sugar imports in the fourth quarter.

The Vietnam Sugar Association says the auction program of sugar import quotas is beneficial to domestic sugar enterprises. In 2016, it yielded VND138 billion for the state budget. Enterprises also profited from selling imported refined and raw sugar. Holding the auction in the last quarter of the year is also considered advisable as domestic sugar businesses finish the season and the auction does not impact sugar production.

Four traders won the auction last year, namely the Vietnam Sugar JSC: 20,000 tonnes; the TTC Bien Hoa – Dong Nai Sugar One Member Limited Company: 4,000 tonnes; the Thanh Thanh Cong – Bien Hoa JSC: 4,000 tonnes and the Bien Hoa – Ninh Hoa Sugar One Member Company Limited: 2,000 tonnes.

Along with auctioning sugar imports, the MoIT also urged market management forces to improve the effectiveness of sugar anti-smuggling activities, creating a fair and healthy competitive environment, thereby facilitating the development and integration of sugar enterprises.

Bao Ngoc