Rising sugar cane prices in Vietnam have prompted Mekong Delta farmers to shift to growing cane from tending Logan farms or shrimp ponds, officials said on Monday, amid forecasts that the country would be short at least 200,000 tonnes of sugar this year.
Sugar cane prices hit a record 650,000 dong per tonne ($41) this month in the Delta's key growing province of Soc. Trang as refiners scrambled to buy the material in the middle of their crushing season, said provincial official Pham Quahog Hug.
"It's natural as farmers started growing more sugar cane after seeing the price hit a record," said Huy, an economic expert at the People's Committee of Cu Lao Dung district. State-run Vietnam Television said late on Sunday that farmers in other Mekong Delta provinces were also switching their fruit crops or shrimp to sugar cane.
It said the Agriculture Ministry was seeking permission to import at least 100,000 tonnes of white sugar to offset the domestic shortfall. Regional traders last week-estimated Vietnam's demand at 500,000 tonnes of raw and white sugar.
Huy said farmers earned 65-70 million dong ($4,100-$4,400) from one hectare of sugar cane, compared with 15-20 million dong from growing longings. Cu Lao dung farmers produced 120-200 tonnes of cane from one hectare, depending on the variety.
Vietnam's average yield of cane is 47 tonnes per hectare, the Agriculture Ministry said. It said the total sugar cane area this year dropped 5.4 percent from last year to around 265,000 hectares (655,000 acres), following a drought last year.
Cane is grown anew every three years and harvested between November and May. Given the drought impact, the harvest this year could end next month, industry officials have said. Refined sugar is selling for between 10,500-13,000 dong per kg on a retail basis in Vietnam's key consuming southern region, a surge from 6,800 dong to 7,500 dong in the same period last year.
Agriculture Minister Cao Duc Phat said Vietnam must take opportunity of the high sugar prices to grow more cane and increase productivity. "Our target was to develop the area for raw material to an extend to have sufficient sugar for the domestic demand," Phat was quoted on Monday by the Vietnam Agriculture newspaper as telling an industry meeting at the weekend.
"In order to produce 1.4 million tonnes of sugar there must be 15 million tonnes of sugarcane, or we need another 3 million tonnes of cane more," he said. Vietnam is expected to refine 1 million tonnes of sugar this year, while demand is forecast at 1.2 million tonnes.
Last year it turned out 1.09 million tonnes, a fall of 18.5 percent from 2004. Last week, the Vietnam News Agency quoted Deputy Trade Minister Phan the Rue as saying that a sugar import quota would be issued by June and the import tax could be halved to 20 percent.
Vietnam produced 387,800 tonnes of sugar in the first two months of this year, or 0.6 percent higher than a year earlier, the government statistics showed.
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