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Vietnam’s sugar industry is facing mounting difficulties as sugar prices continue to fall, weakening the production linkage chain between sugarcane farmers and processing firms. Sugarcane farmers are earning low incomes, enterprises are carrying heavy financial burdens, and the market lacks an effective protection mechanism.
In an interview with Vietnam Economics/VnEconomy magazine, Nguyen Van Loc, chairman of the Vietnam Sugarcane Association, warned that “if timely solutions are not found, the risk of a systemic breakdown of the entire industry is real.”
Vietnam previously built a relatively solid production-consumption linkage chain, helping ensure outlets for sugarcane and supporting the livelihoods of about 220,000 households, including many in remote, border, or mountainous areas.
From the 2023/24 crop year onward, measures to improve competitiveness helped raise yields. Vietnam’s sugarcane yields have since led the Southeast Asia region compared with major producers such as Thailand, Indonesia, and the Philippines.
However, from 2025 to the present, the linkage chain has encountered multiple challenges. Sugar prices have fallen by more than 3,000 dong per kilogram, reaching about 84% of the level in the same period last year. Meanwhile, cane purchase prices in Vietnam remain around 1.2–1.5 million dong per ton, roughly 1.5 times higher than in Thailand.
During the 2025/26 production season, the industry faces unprecedented difficulties as last year’s stock sugar remains large and consumption prospects are limited. Sugar processing firms are described as being in a “visible-outside, hidden-inside” situation: outwardly maintaining stability due to stock listing pressures, while internally bearing large financial burdens.
Many companies, even while reporting losses, still publish positive financial statements to avoid a stock sell-off, capital withdrawal, or tighter credit conditions from banks. Because the sector is capital-intensive with long payback cycles, financial pressure is increasing and could disrupt the sugar supply chain if solutions are not implemented promptly.
With products not selling, factories have lowered cane purchase prices to around 1 million dong per ton. Farmers report that cane prices are low, even though Vietnam’s current cane purchase prices remain higher than in many regional countries.
With current average yields, each hectare of sugarcane generates revenue of about 68–69 million dong. After costs, farmers’ actual profits fall to approximately 25–40 million dong per hectare, which is described as very low compared with other crops such as coffee, pepper, fruit trees, or rice.
Input costs—fertilizers, sugarcane seedlings, and labor—are higher than in many regional countries, raising production costs. Distribution inefficiencies also contribute to higher prices reaching farmers.
The chairman of the association contrasts Vietnam’s situation with Thailand, where cane growers receive government support, including input subsidies and cane purchase support, helping maintain stable profits. In Vietnam, farmers rely almost entirely on market prices for sugarcane and receive limited government support, including during natural disasters or adverse conditions.
Although domestic sugar is priced lower than in Southeast Asian peers, smuggling continues to flood the market. The association says smuggled sugar avoids taxes, while domestically produced sugar is taxed. Smuggling is mainly cash-based and conducted without invoices to evade tax obligations, particularly as new regulations will remove tax caps on household businesses from 2026.
The Vietnam Sugar Association recommends concrete measures to strengthen market protection and restore transparency. It calls for strict enforcement of government directives against smuggling and for applying international best practices to manage sugar imports, especially dumped sugar and HFCS.
The association also points to regional approaches:
In contrast, Vietnam’s sugar market is described as lacking effective protection mechanisms. The association says resolving “restricted zones” in market management is necessary to restore a transparent business environment, ensure fair competition, and maintain stability for the sector.
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