April 01, 2023 17:03

Advertisement Contact us RSS
Hải quan Online Doanh nghiệp & Hải quan Hải quan Videos Vietnamesehttps://haiquanonline.com.vn/

Concerns that Thai sugar is evading tax to import into Vietnam

10:20 | 03/04/2021

VCN - In addition to the imposition of anti-dumping and anti-subsidy duties, there should be more synchronous measures to control the evasion of trade remedies as well as illegal importation of sugar, so that domestic sugar companiescan recover after a long period of difficultiesdue to imported sugar.

Thai sugar beats domestic supply Thai sugar beats domestic supply
Vietnam initiates anti-dumping investigation into Thai sugar Vietnam initiates anti-dumping investigation into Thai sugar
Thai Sugar imported to Vietnam will face anti-dumping investigation Thai Sugar imported to Vietnam will face anti-dumping investigation
Illegally imported sugaracross the border puts great pressure on domestic sugar companies. Photo: Dang Nguyen

Positive expectations

Evaluating the application of anti-dumping measures and temporary anti-subsidy measures for cane sugar products originating from Thailand by the Ministry of Industry and Trade, Mr. Nguyen Van Loc, Acting Secretary-General of Vietnam Sugarcane Association, said that it was the "life buoy"that appeared in the "life-threatening" situation.Accordingly, after the Tet holiday, factories immediately increased the selling price of sugar and increased the buying price of sugarcane for farmers, in order to share and encourage the farmers to return to sugarcane production.

According to the Vietnam Sugarcane and Sugar Association, in the 2020/2021 crop, the pressed sugarcane output is only 72.3% and the sugar output is only 71.3% compared to the 2019/2020 crop. It is estimated that the sugar output of the 2020/2021 crop is only about 550,000 tons and it is almost certain that the sugar output of the 2020/2021 crop will surpass the record level of the 2019/2020 crop. This amount has revealed the extremely serious damage that the Vietnamese sugar industry has suffered from the devastation of dumpingimported sugar for many consecutive years, and the impact of climate change in recent years in sugarcane producing areas.

SSI Securities Company stated that along with the expectation that smuggled sugar is controlled, the shortage of domestic sugar will support the domestic sugar price to continue to rise, supporting sugar manufacturers to increasegross profit margin and profit improvement.

Because the sugarcane output in the 2020-2021 cropis forecast at a low level, only about 600,000tonscan be produced, this will be an opportunity for sugar mills to increase their capacity of raw sugar refiningout-of-season.The factoriesare geographically located close to the source of biomassexcept for bagasse(agricultural residues such as wood chips, rice husks)will benefit from the off-season production costs.Currently, An Khe sugar factory of Quang Ngai Sugar Joint Stock Company andsome sugar factories of Thanh Thanh Cong –Bien Hoa Joint Stock Company (SBT) have favorable geographical location and have the ability torefine sugar for up to 300 days per year.

SBT is currently the largest sugar company in Vietnam, leading in terms of raw material area, sugar refining capacity and distribution network. Therefore, SBT is considered to benefit faster than enterprises in the industry when there is a safeguard tax on Thai sugar,due to the ability to increase sugar refining capacity up to 300 days per year, using biomass fuelwill support SBT to increase production to meet the shortage of domestic sugar supply.

In addition, the company also has a distribution network of all channels and the largest storage system in the country with 43 warehouses, mainly in the South Central Coast, the Central Highlands and the Southeast.

The price of RS sugar has increased from VND13,500 per kilo at the end of 2020 to VND15,000-16,000 per kilo at the end of February 2021 while RE sugar has also increased from VND14,000 per kilo to VND16,500 per kilo at present.

Experts said that domestic sugar prices still had room to grow from current prices because Vietnam's domestic sugar prices are 30-40% lower than other countries in the region and official import costswill increase by about VND4,000-4,500 per kilo for the RS/RE sugarwhen the 48.88% tax rate was applied.

Accordingly, the sugar price may reach VND17,000 per kilo,approaching the domestic sugar price of other countries in the region in the future,especially in the middle of the year when the factories finish the refining season.

Signs of tax evasion

The decision on imposing anti-dumping tax and anti-subsidy on imported Thai sugar of the Ministry of Industry and Trade is considered to help improve the competitiveness of Vietnam's sugar industry. However, Mr. Loc assessed that these expectations could not be immediately turned into reality, butwill take more time.

According to the statistics of the Sugar Association, before the decision of anti-dumping and anti-subsidy investigation (January 2020 to September 2020), the average volume of sugar imported into Vietnam reached 116,000 tons per month.

However, after issuing the decision(October 2020 to January 2021), the average amount of imported sugar per month increased to over 165,000 tons, equivalent to an increase of 42%.

In addition, the Sugar Association also recorded an increase in sugar imports into Vietnam from a number of ASEAN countries (Cambodia, Laos, Malaysia, Myanmar, and Indonesia) compared to the time prior to the investigation decision.

Data of the General Department of Customs showed that the import prices from these five countries were equal to or lower than the price of Thai sugar in the same period. Thus, the harm of these sugar imports to the domestic production industry also caused serious damage similar to that of sugar imported from Thailand.

Although there are no official figures for February, according to the Vietnam Sugar Association, information from international sugar traders showed the orderrequirements from Vietnam for sugar originating from the five countrieswasstill very high despite rising prices in the international market.

While all five countries did not produce enough sugar for the domestic market andhad to import a large amount of sugar originating from Thailand.

This shows that, February 2021 continues to havesigns of trade defense evasion from the stage of anti-dumping and anti-subsidy investigation on sugar products, in order to cope with the possibility of the temporary application of anti-dumping and anti-subsidy tax, which took retrospective effectin Decision 2466/QD-BCT on the investigation and application of anti-dumping and anti-subsidies measuresfor some sugarcane products originated from Thailand.

In addition, according to Mr. Loc, from February 2021, the commercial fraud of smuggled sugar increased infrequency of operation when sugar prices started to recover under the effect of anti-dumping and anti-dumping tax barriers despiteincreased border control to prevent the Covid-19 pandemic.

“The increase in imported sugar along with smuggled sugar has controlled the free market. This makes enterprises stuck when they have increased the purchase price of sugarcane for farmers after Tet," Mr. Loc said.

After years of being "ravaged" by foreign sugar, the domestic sugar industry is becoming exhausted, leading to low output. It will take 1-2 years for the domestic sugar industry to recover and bring domestic sugar prices closer to regional prices.

Therefore, in order for the application of anti-dumping and anti-subsidy duties to really be effective for the sugar industry in Vietnam, there should be more measures to strictly control the evasion of trade remedies as well as illegal importation of sugar.

By Nguyen Hien/ Binh Minh