vn sugar sep1

Bumper crop, strong export demand bouy long-suffering sugar producers
(VIR- 3-9/9/2001)- INCREASED export demandand forecasts of a bumper crop are breathing new life into the struggling sugar sector.According to the Ministry of Agriculture and Rural Development (MARD), sugar output shouldexceed 1 million tonnes for the 2001-2002 crop -an increase of 100,000 tonnes on lastyear's figures.

Domestic demand for the productshould remain at around 800,000 tonnes. Industry insiders said that if the forecast heldtrue, Vietnam would be able to reserve 200,000 tonnes for export during the 2001-2002crop.

Said Nguyen Thien Luan, MARD deputy minister: "Bothincreasing domestic sugar output and increasing world demand are promising for localproducers, who suffered rock bottom sugar prices in 1999 and 2000.

"We [MARDI are pushing ahead with our marketing plansto sell our products to China, Russia, Indonesia, and Taiwan," he added. Vietnam hasexported around 140,000 tonnes of sugar products, mainly to China since the beginning of2000. According to MARD's Sugar Division, decisions on the part' of the Chinese governmentto close down 140 sugar mills across the country and allow the import of 500,000 tonneswould provide a much-needed fillip for Vietnam's sugar exporters.

Industry insiders said the collapse of the Chinese millswas the result of cane crop losses over the last couple of years. China's sugar demand isaround 8 million tonnes a year, while domestic production output recently dropped to only6 million tonnes. What's more, Russian traders are seeking to buy between 150,000 and200,000 tonnes of unprocessed sugar from Vietnamese producers, according to industryinsiders.

"We should not let the chance slip through ourfingers. Increasing sugar exports to these markets can improve the domestic sugarindustry," Luan said. In response to the growing demand, local producers beganproduction of the 2001-2002 crop last month, despite the fact that the new season usuallybegins in October.

Sugar producers plan to develop 300,000 ha of cane cropsand harvest between 14 and 15 million tonnes of cane to supply 44 operational processingmills. Officials from MARD's Sugar Division added that the market recovery for locallyproduced sugar also gave fresh impetus to both sugar producers and cane farmers. Wholesalesugar prices remain stable at around VND5,800 ($0.41) per kilo in the north and VND6,200($0.44) per kilo in the south. The export price increased roughly 30 per cent to $280 pertonnes.

During the 1999-2000 crop, wholesale sugar prices plungedto around VND4,000 per kilo ($0.28). The sharp decline in sugar prices was due to supplyoutstripping demand and the growing influx of smuggled imports.