Vietnam’s sugar industry reels as prices hit lows amid oversupply, smuggling

Hanoi: Vietnam’s sugar industry is facing severe pressure as domestic prices fall to their lowest levels in the region, leaving companies battling to stay profitable, reports Viet Nam News.

Prices dropped from VNĐ19,300 per kilogram (US$0.73) at the start of 2025 to between VNĐ18,400 and VNĐ18,900 by mid-year. These rates are well below those in neighbouring countries such as the Philippines, Indonesia, and China, even though global prices have remained steady.

The fall has been blamed on oversupply and large amounts of smuggled sugar flooding the market. With consumption weakening, companies have seen profits shrink sharply.

Kon Tum Sugar JSC reported its net profit for the fourth quarter of 2024–2025 at less than VNĐ4 billion, an 82 per cent drop. Revenue fell 15 per cent to VNĐ101 billion, and gross profit margins slid from 25.3 per cent to 16.8 per cent.

Son La Sugar JSC also saw heavy losses, with net profit down 59 per cent to VNĐ96.5 billion, though it maintained the industry’s highest margin at 27.8 per cent. Both firms said oversupply and smuggling were the main reasons for their weak performance.

Not all companies posted losses. Thanh Thanh Cong – Bien Hoa JSC saw revenue fall 28 per cent to VNĐ6.8 trillion, but net profit rose 4 per cent to VNĐ203 billion after cutting administrative and sales costs. Lasuco also performed strongly, reporting a 91 per cent rise in net profit to VNĐ58 billion thanks to tighter expense control and higher margins.

Quang Ngai Sugar JSC, which reports results on a calendar-year basis, faced steep pressure too. Its revenue fell 23 per cent to below VNĐ1.69 trillion, while gross margins dropped from 31.7 per cent to 23.1 per cent. Net profit for the first half of 2025 slid 23 per cent to VNĐ938 billion.

Weak demand has left companies with growing inventories. By the end of June 2025, Lasuco’s stock rose 56 per cent to nearly VNĐ1.7 trillion, Kon Tum Sugar’s climbed 67 per cent to VNĐ252 billion, and Lam Son Sugar’s increased 17 per cent to VNĐ511.5 billion. Quang Ngai Sugar saw the largest buildup, with inventory nearly doubling to VNĐ2.6 trillion, most of it unsold products.

Nguyễn Văn Lộc, chairman of the Vietnam Sugarcane and Sugar Association (VSSA), said the industry cannot recover unless smuggling is brought under control. “Unless the flow of illegal sugar is stopped at the border, any support policies or company measures will only have a limited effect,” he said.

Experts say companies must continue cutting costs, keeping a closer watch on inventory, and finding new sales channels. But many agree that tackling smuggling remains the most important step to stabilise the market.