ASEAN KEY DESTINATIONS
Sugar group opposes imports from Laos
Mixed opinions arose over Hoang Anh Gia Lai Group's recent proposal to the Ministry of Industry and Trade for an import quota for 30,000 tonnes of sugar from the group's factory in Laos's Attapeu Province in the 2013-14 crop.
The Vietnam Sugar Association has suggested the Prime Minister not allow the import.
In addition, the association asked the Prime Minister not to permit small-volume exports of sugar not originating from Viet Nam through Ban Xuoc border gate, from northern Lao Cai Province's Bat Xat District to China.
This was in response to Bien Hoa Sugar Company's request for permission to import crude sugar produced in Laos by Hoang Anh Gia Lai, to be processed for re-export.
The association estimated the 2012-13 crop to lift the sugar inventory to around 400,000 tonnes and expected the stockpile to remain large after the coming crop, forecast to amount to 600,000 tonnes.
Together with the large volumes of smuggled sugar breaching Vietnam's borders, the import, if allowed, would become a burden on more than forty local sugar processing plants and million of farmers.
With the domestic sugar industry in strife, small-volume exports to China were the only choice for local producers, according to the association.
It said that importing Hoang Anh Gia Lai's sugar manufactured in Laos for processing and re-export would badly affect local industry.
The price of Hoang Anh Gia Lai's sugar manufactured in Laos is much lower than that produced locally, thanks to the Lao Government incentives. Consequently, re-export prices will still be lower than local prices, meaning Vietnamese manufacturers will be unable to compete.
However, chairman of Hoang Anh Gia Lai Doan Nguyen Duc was quoted by Tuoi Tre (Youth) newspaper as saying the import would have no impact on the domestic sugar industry because the sugar would all be re-exported after processing.
He said this would help provide Bien Hoa Sugar Company with raw materials and that the firm would also pay taxes to the Government.
He added that according to its World Trade Organisation commitments, Viet Nam must import thousands of tonnes of sugar each year. So, importing sugar manufactured by Hoang Anh Gia Lai in Laos would help Vietnamese enterprises.
According to Tran Cong Thang from the Institute for Agriculture and Rural Development Strategy, domestic sugar production cost were currently high.
The ASEAN tariff removal scheduled for 2015 would hit the sector hard if domestic producers could not lower costs and improve quality.
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