Smuggled sugar drives prices to three-year low in Vietnam
Vietnam continues to protect its sugar industry with anti-dumping duties of 42.99% and countervailing duties of 4.65% on Thai sugar. However, abundant imports and smuggled sugar have pushed domestic prices to three-year lows, while border smuggling from Laos remains a major challenge.
For years, Vietnam’s sugar sector has struggled to compete with low-priced imports from Thailand. In response, the Ministry of Industry and Trade introduced anti-dumping and countervailing duties on certain Thai sugar products in 2021.
While direct sugar imports from Thailand fell sharply, imports from several ASEAN countries, including Laos, Cambodia, Indonesia, Malaysia and Myanmar, subsequently increased at an unusual pace.
Government investigations later found evidence suggesting that some shipments were circumventing Vietnam’s trade defence measures through transshipment arrangements or changes to product origin before entering the Vietnamese market.
To address the issue, the ministry imposed additional tariff barriers on sugar imports from the five countries in 2022.
More recently, authorities extended the measures, maintaining anti-dumping duties of 42.99 per cent and countervailing duties of 4.65 per cent on sugar originating from Thailand.
Industry experts say the measures are necessary to ensure fair competition for domestic producers. However, they argue that the policies have only partially addressed the industry’s challenges.
According to the Vietnam Sugarcane and Sugar Association (VSSA), domestic sugar consumption has remained sluggish for several months due to abundant supply from both the 2025-2026 production season and continued inflows of imported and smuggled sugar.
Nguyen Van Loc, chairman of the VSSA, said that despite efforts by producers to lower prices and improve product quality, domestic sugar prices have fallen to their lowest level in three years.
Refined sugar is currently selling for between VND 17,200 and VND 17,600 per kilo, while smuggled sugar in border provinces is reportedly available for around VND 16,300 per kilo.
According to the association, these prices are about 15 per cent lower than sugar prices in China, 65 per cent lower than those in Indonesia and 67 per cent below prices in the Philippines.
In addition to price competition, smuggled sugar benefits from illegal trading practices, including sales without invoices and cash-only transactions designed to conceal revenue and evade taxes.
This places legitimate producers at a disadvantage as they are required to comply with tax obligations, quality inspections and product traceability regulations.
The VSSA said sugar sales from domestic sugarcane producers in April fell to their lowest level in many years.
Border smuggling remains a challenge
Despite intensified inspections and enforcement efforts, sugar smuggling continues to pose a significant problem in several border regions.
One of the main hotspots is the Se Pon River, which forms part of the natural border between Vietnam and Laos near Lao Bao in Quang Tri Province.
In April, the VSSA conducted a field survey in the area in cooperation with several media organisations.
The survey found that sugar stockpiles in the Lao town of Dansavanh, about three kilometres from Lao Bao International Border Gate, regularly ranged between 3,000 and 5,000 tonnes.
From there, smugglers allegedly transport sugar into Vietnam in small but frequent shipments to avoid detection by authorities.
According to the association, hundreds of small boats are used to cross the Se Pon River, each carrying between three and five tonnes of sugar. Smuggling operations often take place at night or during patrol shift changes.
“If authorities do not take stronger action against sugar smuggling, while also improving oversight of undocumented transactions and tax evasion, domestically produced sugar will face increasing difficulties finding buyers,” a VSSA representative said.
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Source : DTI News
