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The ministries and Industry and Trade, and Agriculture and Rural Development recently asked the government to green-light the import of 70,000 tonnes of sugar under quota regime.
The Ministry of Industry and Trade (MoIT) argued that by July 15 inventory levels at sugar plants amounted to 240,000 tonnes, down 54,000 tonnes on-year. Hence, without imports the domestic market may face sugar shortages, particularly high-quality refined sugar.
However, the list of firms getting quotas for sugar import still remains unknown.
“The MoIT had yet to unveil which firms would be eligible to get sugar import quotas so that in fact we could not know what firms will import sugar and whether they import to sell in the domestic market or then re-export to catch profits,” said Vietnam Sugar and Sugarcane Association deputy chairman.
In reality, firms have raced for quotas to import sugar with volumes far exceeding their actual demand. In 2011, the MoIT took back quotas for importing 850 tonnes of raw and refined sugar from International Food Joint Stock Company and Orana Vietnam Joint Venture Company.
A Ministry of Agriculture and Rural Development (MARD) executive estimated the tax difference when importing 70,000 tonnes of sugar with and without quotas could reach several million US dollars as the import duty of imported sugar with quotas is 15 per cent against 80-100 per cent for imported sugar without quotas.
That was why every year food firms race for quotas to import sugar.
To promote transparency in sugar import quotas provision, Vietnam Sugar and Sugarcane Association general secretary Nguyen Hai said the association had proposed the MoIT apply bidding process for sugar imports from next year.
Accordingly, firms with top bidding price will win.
The association reportedly voiced the proposal to the MoIT several times in the past, but at these times the MoIT said taking that move was still inappropriate in Vietnam’s conditions.
“Holding bids for sugar import was long applied in the Philippines. Vietnam can follow suit since procedures remain simple,” said Liem.
This idea was echoed by MARD Deputy Minister Diep Kinh Tan who said a clear and transparent sugar import mechanism to firms was now urgent.