Vietnam Sugar Market

Topics: Sugar, Sugarcane, Sucrose Pages: 182 (44685 words) Published: May 6, 2013
Vietnam sugar program
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Prepared for the World Bank

Centre for International Economics Canberra & Sydney December 2001

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Preface Summary
Concerns about the industry’s international competitiveness Better policies could deliver higher productivity Vietnamese policy makers must choose Policy changes to realise the productivity potential and international competitiveness of the industry

vii viii
viii x xiv xv


Why this study?
Investment in the sugar industry has been rapid and large Questions are emerging about sugar’s competitiveness Objective Our approach

1 2 2 3


The main structural elements of the industry
The industry is distributed widely throughout the country Mill sizes vary considerably Consumption can be segmented by product, buyer and region Patterns of production, consumption and imports

5 8 10 10


Policies affecting the sugar industry
The one-million-tonne sugar program Objectives of the program Instruments of the policy

16 16 18


Effects of policy
Economic effects of trade policies Economic effects of government controls over milling Economic effects of subsidies Strong market intervention discourages efficient investment

31 33 37 37






Economic performance
Competitiveness of sugar production Sugar’s contribution to the Vietnam economy

40 54


Future competitiveness
Future consumption growth The impact of subsidies on the industry and wider economy The impact of trade restrictions on the industry and economy The impact of higher productivity on the industry and economy Emerging principles

62 64 68 72 82


Policy challenges
Policies to realise the productivity potential of the industry Choosing the high--subsidy option

85 95

APPENDICES A Organisations consulted as part of this project B Model of the Vietnamese sugar industry C Comments and responses to the seminar on this report References Boxes, charts and tables 2.1 2.2 2.3 2.4 2.5 2.6 2.7 4.1 4.2 4.3 4.4 5.1 Sectors and regions represented in the model Vietnam — sugar mills Average annual cane crush for varying sized mills Distribution of production Sugarcane production growth has been strongest in the Centre Per person and total consumption of sugar products Growth in production, consumption and imports Economic impacts of trade restrictions There are distinct economies of scale in milling Economic impacts of small mills and high costs Economic impacts of subsidies International benchmarks

97 98 99 105 119

6 7 9 11 12 13 14 32 34 38 39 42



References: A French Study on Sugar and Cane Industry in Vietnam till 2010–2020. Beard, J, Cuthbertson, S and Pearce, D 1999, Non-tariff barriers in Vietnam: A framework for developing a phase out strategy, The Centre for International Economics, Canberra. Borrell, B, Pearce, D 1999, Sugar: The Taste Test of Trade Liberalisation, The Centre For International Economics, Canberra. Sugar program of 1 million ton of Vietnam has been completed in the year 2000: Results, constraints and future prospects, paper by Ha Duc Ho, Hanoi. The Centre for Rural Progress (CRP) 2000, Globalisation and its Impact on Poverty: Case Studies, Volume 1 A Case Study of Rural Households in Lam Son, Thanh Hoa Province, Hanoi. The Ministry of Agriculture and Rural Development (MARD) and the Ministry of Fisheries, Vietnam 2000, The Competitiveness of the Agricultural Sector of Vietnam: A preliminary analysis in the context of Asean and AFTA, Ministry of Agriculture and Rural Development, Vietnam. The World Bank, Asian Development Bank and UNDP 2000, Vietnam 2010: Entering the 21st Century - Pillars of Development, The World Bank, Hanoi. 2000, Dieu tra muc song dan cu Viet Nam: Viet Nam Living Standards Survey 1997– 1998, Statistical Publishing House, Hanoi.
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