Vietnam’s sugar industry is facing mounting pressure from a surge of undocumented, low-cost sugar entering the market, a challenge that threatens domestic production and stability. Despite repeated appeals for government support, officials insist that businesses themselves must also adapt to survive, reports Vietnamnet.vn.
At the annual review meeting for the 2024/2025 sugarcane crop, the Vietnam Sugar and Sugarcane Association (VSSA) raised alarms over what it called a make-or-break situation for the sector. Chairman Nguyen Van Loc pointed to the influx of smuggled sugar, which he said is overwhelming the local market and driving inventories to record levels.
“Each year, we estimate between 500,000 and 600,000 tons of sugar is smuggled in. By July, local stockpiles had reached more than 60% of seasonal output, pushing prices down and hitting millions of farmers hard,” Loc said. “If this problem is not brought under control, local companies could lose their place in the market.”
The VSSA urged the government to step up anti-smuggling measures and create policies that would both protect food security and support the development of a fair, competitive sugar industry.
Nguyen Hong Phong, a senior official from the Ministry of Agriculture and Environment, acknowledged that while legal imports are regulated, illegal cross-border trade is far more difficult to monitor. He said the ministry would work with the association and businesses to understand the scale of the problem and build support strategies.
At the same time, Phong stressed that companies cannot depend entirely on government protection. “Production costs in Vietnam remain higher than in neighboring countries. Businesses need to cut expenses, improve efficiency, and create higher-value products if they want to compete,” he said.
Despite the challenges, the sugar sector showed signs of progress in 2024. VSSA Vice Chairman Cao Anh Duong reported that sugarcane cultivation expanded to more than 185,000 hectares, up by over 10,000 hectares from last year. Average yields improved slightly to 68.3 tons per hectare, helping national output climb to 12.67 million tons, a 7% increase year-on-year.
Prices for sugarcane at the farm level also improved, ranging from VND 1.2 to 1.3 million per ton ($50–$54), compared with below VND 824,000 per ton ($34.40) in the 2019/2020 season. These higher prices have restored farmer profits and encouraged renewed investment in sugarcane farming.
Vietnam’s sugar productivity reached 6.69 tons per hectare in the 2024/2025 crop, the highest in ASEAN and ahead of Thailand, Indonesia, and the Philippines. This marks a strong recovery after years of difficulties.
Yet, despite higher yields, Vietnamese sugar prices remain lower than in much of the region—just 66% of Philippine prices, 70% of Indonesia’s, and 94% of China’s. The gap highlights an ongoing weakness in value and competitiveness, even as production strengthens.
