Sugar imports from five ASEAN countries increased by 10 times

In the first half of this year, the amount of sugar imported from Cambodia, Laos, Malaysia, Myanmar, and Indonesia into Vietnam reached 399,189 tons, 10 times higher than 38.61 tons in the same period last year.

According to the Sugarcane Production Report in July 2021, which has just been announced by the Vietnam Sugar Association, there has been an unusual phenomenon in sugar imports into Vietnam from some ASEAN countries.

Citing data from the General Department of Vietnam Customs (Ministry of Finance), the Vietnam Sugarcane and Sugar Association stated that in the first half of this year, the amount of sugar imported from Cambodia, Laos, Malaysia, Myanmar, and Indonesia into Vietnam reached 399,189 tons, 10 times higher than 38.61 tons in the same period last year.

Speaking to Customs News about this spike in sugar imports, the representative of the Vietnam Sugarcane and Sugar Association said that all five ASEAN countries mentioned above have absolutely no development in sugar cane competitiveness that can export sugar to Vietnam with such explosive growth.

This is truly a clear sign of a move to elude anti-dumping duties and anti-subsidy taxes for cane sugar products originating from Thailand when all five countries have imported sugar from Thailand. The nature of sugar imported into Vietnam from the five ASEAN countries mentioned above is related to originating from Thailand.

"The entire amount of sugar above is only subject to 5% tax compared to the tax rate that should be paid at 33.88% and 48.88% depending on the type of sugar," the representative said.

Regarding sugar imports in general in the first half of this year, calculated from the statistics of the General Department of Vietnam Customs, the amount of imported sugar reached 781,334 tons with a total value of more than US$367.2 million. Experts in the sugar industry said that this is an unprecedented number in Vietnam's sugar industry.

Meanwhile, in the domestic market, the sugar production season ended with an output of 689,830 tons, lower than the output of 763,931 tons of sugar in the previous season. Notably, the demand for sugar has dropped to the lowest level in the last two months under the effect of the pandemic, leading to social distancing and restricting the circulation of goods.

In the current context, imported sugar completely dominates the market and the sugar supply is sufficient to meet the market demand.

Regarding increasing sugar imports from the five ASEAN countries, there are clear signs of a move to elude anti-dumping duties and anti-subsidy taxes on cane sugar products originating from Thailand. On the morning of August 17, 2021, Mr. Le Trieu Dung, Director of Trade Remedies Authority of Vietnam (Ministry of Industry and Trade) said, in terms of increased import data, the Department always monitors and strictly follows up on the information.

According to regulations, the Vietnam Sugar Association must have a dossier requesting to initiate an investigation on tax evasion, then the Trade Remedies Authority of Vietnam will take steps to initiate the next investigation.

"Currently, the Trade Remedies Authority of Vietnam has discussed, worked, and provided detailed instructions to the Vietnam Sugarcane and Sugar Association so they can prepare a dossier requesting to initiate an investigation. It is expected that the association will also complete this soon," Mr. Le Trieu Dung said.

The Vietnam Sugarcane and Sugar Association forecasts that in August 2021, the supply of imported sugar will continue to bring sugar to the market through direct imports from Thailand, ASEAN countries, and fraudulent trade across the Southwest border, plus sugar produced from domestic cane.

Sugar consumption demand will depend on the ability to control the pandemic and there will be no shortage of sugar in August and September 2021; the market advantage still belongs to imported sugar and the domestic sugar price will fluctuate in line with the world sugar price.

On the world market, the average spot price of raw sugar in July 2021 was 17.69 cents/lb, up from 17.41 cents/lb in June 2021; 17.25 cents/lb in May 2021; 16.16 cents/lb in April 2021; 15.54 cents/lb as of March 2021.

The average ISO white sugar price index in July 2021 was US$453.3/ton, up slightly from June 2021 at US$449.1/ton, but still not reaching the level of May 2021 at US$458.95/ton, higher than US$446.37/ton in April 2021.

However, the recent spike in international freight rates has continued to narrow the gap between the average price of white sugar and raw sugar for the month, further falling to US$62.96/ton from US$65.34/ton in June 2021 and US$78.48/ton in May 2021. This reduction causes the smelting operation to continue to decrease inefficiency.

Source: Custom News