Smuggled sugar and imported corn syrup threaten domestic sugar industry

Sugar bags are loaded at a factory in Cao Bằng Province. — VNA/VNS Photo Chu Hiệu

HÀ NỘI — Smuggled sugar and cheap high-fructose corn syrup have dominated the domestic market. That has been causing difficulties for local sugar factories and affecting the income of farmers, according to the Vietnam Sugarcane and Sugar Association (VSSA).

Provincial market management agencies said that the smuggling of sugar into Việt Nam is continuing, with violations reported in June and July.

On June 28, a man was caught in the southern province of Long An with about 3.5 tonnes of smuggled sugar.

Later on July 31, a household business in Đồng Nai Province’s Biên Hoà City was found to have 60 bags of smuggled sugar. The sugar was packed in 50-kilogram bags worth VNĐ59.4 million.

Similarly, 40 bags of refined sugar weighing two tonnes were detected at a facility in HCM City. At the time of inspection, its owner could not present invoices or documents proving the origin of the goods, or any documents related to product quality.

Meanwhile, over the past seven months, Việt Nam imported over 143,500 tonnes of high-fructose corn syrup compared to 139,800 tonnes seen in the last year’s corresponding period, the association said, quoting data from the General Department of Customs.

According to VSSA, the total sugar supply reached nearly 1.34 million tonnes in the past seven months, higher than 1.3 million for the whole year of 2023, when the oversupply was also recorded.

By the end of July, about 60 per cent of the sugar produced in the 2023-24 crop was stockpiled at the warehouses of sugar factories, the association said.

It also forecast that the abundant sugar supply from direct official imports of sugar from ASEAN countries, fraudulent sugar smuggled across the southwest border and the poor purchasing demand, would lead to an oversupply in the local market, causing sugar factories to have to stockpile in the remaining months of this year.

Over the longer term, the association said there would be a risk of market disruption should the surplus prevail, which would likely force domestic producers to cut prices, even lower than production costs, in order to compete or to reduce prices they pay sugarcane farmers.

Industry experts said imported sugar often had the upper hand due to lower prices.

A merchant at Tân Hiệp Market in Biên Hòa City, said her customers often preferred imported sugar while buying in large quantities.

While being sold at a higher price point, there was not much of a difference in quality between imported and domestic brands. This pushed most consumers who required large quantities to go for imported sugar.

Industry experts have long voiced their concern over a lack of strong domestic brands, as well as an inadequate distribution network to reach consumers.

Some domestic producers, however, had taken the initiative to build their network by collaborating with major retailers and e-commerce platforms.

A representative from a sugar firm said his firm had started expanding sales on popular e-commerce platforms such as Lazada, Tiki, Sendo and Shoppee in recent years.

He said Vietnamese consumers still had a preference for domestic sugar, but it was crucial for producers to introduce new lines and bring down prices to be able to compete against imported sugar.— VNS