Vietnam’s sugar industry hit hard by smuggled imports and weak pricing
Vietnam’s sugar sector faces severe pressure from 500,000–600,000 tons of smuggled sugar annually, pushing inventories to 60% of output and depressing prices. At the 2024/25 crop review, VSSA urged stronger anti-smuggling measures. Officials stressed cost reductions and value-added products, despite higher yields, restored farm profits, and ASEAN-leading productivity.
Vietnam’s sugar industry is grappling with a surge of cheap, undocumented smuggled sugar that threatens local production and market stability. Despite repeated calls for government support, authorities argue that domestic businesses must also take proactive steps to survive.
At the recent annual review conference for the 2024/2025 sugarcane crop held by the Vietnam Sugar and Sugarcane Association (VSSA), Chairman Nguyen Van Loc warned that the sector faces “life-or-death” challenges. Chief among them is the influx of low-cost, untraceable sugar flooding the local market, severely disrupting domestic balance and pushing inventories to record highs.
“Smuggled sugar is inflicting heavy losses on the domestic sugar industry. We estimate 500,000 to 600,000 tons of smuggled sugar enters the market each year. As of July, domestic inventory had reached more than 60% of total seasonal output, driving down local prices and impacting millions of sugarcane farmers,” said Loc.
“If smuggling is not controlled, local enterprises will struggle to survive and could lose their foothold in the domestic market,” he cautioned.
Faced with this reality, VSSA has urged the government and relevant ministries to intensify anti-smuggling and anti-fraud measures, while creating mechanisms to ensure food security, support the development of the sugar industry, and foster a fair and competitive market aligned with international standards.
Nguyen Hong Phong, Director of the Department of Quality, Processing, and Market Development under the Ministry of Agriculture and Environment, acknowledged that while official sugar imports can be regulated, the issue raised by VSSA stems from illicit cross-border trade, which is complex and difficult to monitor. He affirmed the ministry’s commitment to working with VSSA and industry players to clarify the problem’s scope and develop comprehensive industry support strategies.
However, Phong also emphasized that domestic enterprises must take responsibility for their own survival: “Production costs in Vietnam are still higher than in neighboring countries. Businesses must review operations, cut costs, and invest in value-added sugar products to improve competitiveness. We cannot always rely on policy adjustments.”
According to Dr. Cao Anh Duong, Vice Chairman of VSSA and Director of the Vietnam Sugarcane Research Institute, Vietnam’s total sugarcane cultivation area reached over 185,000 hectares in 2024 – an increase of more than 10,000 hectares from the previous year. Average yields rose slightly to 68.3 tons per hectare, up from 67.7 tons/ha in 2023, pushing total national output to 12.67 million tons, a 7% increase year-over-year.
Farmgate prices for sugarcane ranged from VND 1.2 to 1.3 million per ton (approximately $50 to $54), significantly higher than the under VND 824,000/ton (around $34.40) recorded in the 2019/2020 season. This improvement has restored farmer profits, expanded sugarcane cultivation, and encouraged long-term engagement with the crop.
Vietnam’s average sugar productivity in the 2024/2025 crop hit 6.69 tons/ha, the highest in ASEAN, surpassing Thailand (5.20 tons/ha), Indonesia (4.76 tons/ha), and the Philippines (4.62 tons/ha). This performance is a testament to the sugar sector’s strong recovery and resilience after years of hardship.
Paradoxically, despite these gains, Vietnamese sugar prices remain lower than those in the region – just 66% of Philippine prices, 70% of Indonesia’s, and 94% of China’s. This underscores a persistent weakness in value and competitiveness across the sector, even as yields improve.
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