Vietnam’s Sugar Sector Battles Smuggling and Market Challenges
Vietnam’s sugar industry faces heavy pressure from an influx of smuggled, low-cost sugar, with 500,000–600,000 tons entering annually, swelling inventories to 60% of output and depressing prices. The VSSA warns of market loss without stronger anti-smuggling measures. Officials urge efficiency, cost-cutting, and innovation as cultivation and yields show modest recovery.
Vietnam’s sugar sector is under increasing strain from a flood of undocumented, low-cost sugar flooding the market, threatening native output and stability.
Despite repeated requests for government assistance, officials stress that enterprises change as well in order to survive, according to Vietnamnet.vn.
At the annual assessment meeting for the 2024/2025 sugarcane crop, the Vietnam Sugar and Sugarcane Association (VSSA) highlighted concerns about what it described as a make-or-break situation for the industry.
Chairman Nguyen Van Loc cited the influx of imported sugar, which he claims is overwhelming the local market and driving inventories to record levels.
Loc said, as reported by Chini Mandi.com, “Each year, we estimate between 500,000 and 600,000 tons of sugar is smuggled in. By July, local stockpiles had reached more than 60% of seasonal output, pushing prices down and hitting millions of farmers hard.”
“If this problem is not brought under control, local companies could lose their place in the market,” he added.
The VSSA urged the government to strengthen anti-smuggling efforts and implement regulations that will ensure food security while also promoting the development of a fair, competitive sugar industry.
Nguyen Hong Phong, a senior official at the Ministry of Agriculture and Environment, admitted that while legal imports are supervised, unlawful cross-border trading is much more difficult to monitor.
He said the ministry would collaborate with the association and businesses to assess the scope of the problem and develop support methods.
At the same time, Phong emphasized that companies cannot rely solely on government protection.
“Production costs in Vietnam remain higher than in neighboring countries. Businesses need to cut expenses, improve efficiency, and create higher-value products if they want to compete,” he said.
Despite the hurdles, the sugar industry showed signs of improvement in 2024.
VSSA Vice Chairman Cao Anh Duong revealed that sugarcane cultivation has increased to more than 185,000 hectares, up more than 10,000 hectares from the previous year. Average yields increased marginally to 68.3 tons per hectare, bringing national output up to 12.67 million tons, a 7% increase year on year.
Sugarcane prices at the farm level have also risen, ranging from VND 1.2 to 1.3 million per ton ($50-$54), up from below VND 824,000 per ton ($34.40) in the 2019/20 season. These increased prices have restored farmer income and prompted fresh investment in sugarcane farming.
Vietnam’s sugar productivity during the 2024/2025 harvest was 6.69 tons per hectare, the highest in ASEAN and ahead of Thailand, Indonesia, and the Philippines. This represents a significant recovery following years of hardship.
Despite increasing yields, Vietnamese sugar prices remain cheaper than in much of the area, at 66% of Philippine prices, 70% of Indonesia’s, and 94% of China’s. The disparity demonstrates a continuous lack in value and competitiveness, even as output increases.
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Source : IBT
