Local sugar companies should not accept low export prices as global demand is still high, outstripping supply by a large margin, an industry official said.
Global sugar supply this year will fall short of demand by up to 9.7 million tons this year, compared with the previous forecast of 7 million tons, Vo Thanh Dang, chairman of the Vietnam Cane Sugar Association, was quoted as saying by the Vietnam Economic Times Tuesday.
"Many people say sugar prices are driven by international speculators. As a result, local companies should not rush to sell sugar at low prices."
But Dang said if sugar companies want to halt sales and wait for higher prices, they need to have enough capital to pay farmers and continue investing in their production.
The sugar association has requested commercial banks to offer preferential credit policies to businesses and proposed that the government creates a stockpiling plan, he said.
Vietnam's sugar output is expected to reach 963,200 tons from the current crop which started at the end of August last year. Dang said there would be enough sugar for the domestic market.
However, according to Information Center for Agriculture and Rural Development, local production will be able to meet less than 75 percent of this year's demand, estimated at around 1.51 million tons. The market will still see a considerable shortage, of about 410,000 tons, the center said.