Vietnam is expected to face a shortage of 50,000 tonnes of sugar next month before the October start of the sugarcane harvest and confectionery makers gear up production ahead of several festivals. The state-run Lao Dong newspaper quoted Deputy Trade Minister Phan the Rue on Thursday, as saying only 140,000 tonnes would come from domestic stocks in September, when demand would be 190,000 tonnes.
Refineries are expected to start production from September 15, two weeks than usual, the Agriculture Ministry said. Vietnam normally harvests sugarcane between October and March and crushing ends in May.
The government has addressed the shortage by allowing several importers of crude sugar to retain their purchases for domestic sale instead of refining it for re-export.
Domestic sugar demand started rising from July as confectionery makers prepare monocles for the mid-autumn festival on September 18. The high season for sweet consumption is the Lunar New Year festival, which falls next year in late January.
This year, the Trade Ministry allowed Vietnamese companies to import 82,000 tonnes of raw sugar in two separate purchases as domestic output of around 1 million tonnes a year proved insufficient to meet demand for the first time since 1999.
Agriculture officials have estimated drought damage would leave Vietnam short of about 150,000 tonnes of refined sugar this year. Refined sugar prices jumped to between 8,800 dong and 9,500 dong ($0.556-$0.60) per kg last week from 7,400-7,500 dong in late May when the crushing season ended. The price surge triggered smuggling of cheap Thai sugar into southern Vietnam, the key sugar-consuming region, via Cambodia.
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