20-Mar-2021 Intellasia |
VNS |
7:02 AM
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The prospects for the home sugar {industry} look brighter this yr attributable to efforts to manage smuggling and the imposition of duties on sugar imported from Thailand.
A report from SSI Analysis, the analysis division of brokerage agency SSI Securities that was introduced on Monday revealed that the COVID-19 pandemic interrupted the restoration cycle of the sugar {industry} which began on the finish of 2019, pushing sugar costs to 10-year lows.
Nonetheless, sugar costs recovered in a short time with the typical worth in 2020 9.6 per cent increased than in 2019. In the meantime, the shopping for worth of sugarcane was low, serving to sugar corporations earn important gross revenue margins.
In line with the world’s largest sugar dealer Alvean, a three way partnership between Cargill Inc and Brazilian producer Copersucar SA, the worldwide sugar market will face two years of shortages and sugar manufacturing is predicted to fall in need of demand by about 5 million metric tonnes.
World sugar costs went up 11 per cent from 2020 and 56 per cent from the underside stage recorded in April 2020. SSI Analysis stated there was nonetheless important room for sugar costs to extend as world demand remained excessive.
In Vietnam, there could be a scarcity of sugar because the 2020-21 crop output is estimated at simply 600,000 tonnes, a year-on-year drop of 34 per cent, in line with the Vietnam Sugarcane and Sugar Affiliation.
Home demand is predicted to extend by about 3-5 per cent per yr, or 2.2 million tonnes in 2021, that means home provide might meet simply 30 per cent of demand.
The remainder could be made up of sugar refined from imported uncooked sugar, smuggled sugar and imported sugar.
The Ministry of Trade and Commerce determined to impose a short lived anti-dumping responsibility of 48.88 per cent on refined sugar and 33.88 per cent on unrefined sugar imported from Thailand, relevant for 120 days from February 17 with potential retroactivity of 90 days if the investigation funds important accidents or threats to the home sugar {industry}.
SSI Analysis stated with the short-term responsibility, the inventories of sugar imported from Thailand at low costs on the finish of 2020 could be dumped into the market within the first quarter of this yr, which might compete with home sugar for a brief time period.
The refined commonplace (RS) sugar worth elevated from VND13,500 per kilo from the tip of 2020 to VND15,000-16,000 on the finish of February whereas refined additional (RE) elevated from VND14,000 to VND16,500.
The home sugar costs are anticipated to proceed to extend as the present home worth stays 30-40 per cent decrease than different international locations within the area. The duties imposed on imported sugar would additionally push up sugar worth by about VND4,000-5,000 per kilogramme.
Accordingly, sugar is anticipated to achieve VND17,000 per kilo within the home market.
The sugarcane costs additionally elevated by 15-20 per cent in comparison with the earlier season.
Nonetheless, home sugar costs could be affected by smuggled sugar, particularly as anti-dumping duties would create a major hole in costs between imported sugar and smuggled sugar.
The smuggling of sugar within the early months of 2021 decreased significantly as sturdy measures had been taken to manage border areas within the effort to forestall COVID-19 from spreading.
In line with Vietcombank Securities’ report, the prospects for the home sugar {industry} are optimistic within the brief time period, as declines in output in neighbouring international locations present alternatives for Vietnam’s sugar {industry} this crop season.
There are additionally alternatives for exports to the European Union with the EU-Vietnam Free Commerce Settlement.
Nonetheless, Vietcombank Securities identified that the home sugar {industry} confronted quite a lot of challenges in the long run, together with much less aggressive sugarcane output than Thailand, which was pushing up manufacturing prices.
The smuggling of sugar was additionally distorting the market. As well as, Thailand and China might get well sugar manufacturing from the 2021-22 crop seasons, which might create stress on sugar costs.
It was essential to enhance the competitiveness of the home sugar {industry} by means of upgrading applied sciences, Vietcombank Securities stated, including that hyperlinks between farmers and sugar vegetation to make sure secure manufacturing would even be crucial.
http://bizhub.vn/information/sugar-industry-eyes-solid-2021-after-bitter-year_322974.html
Class: Enterprise, Vietnam
Article supply: https://www.intellasia.web/sugar-industry-eyes-solid-2021-after-bitter-year-886166