• In February, Vietnam placed heavy import duties on Thai sugar.
  • On 15th June, the government slight increased the anti-dumping duties and extended them for 5 years.
  • But with a supply deficit of 1m tonnes of sugar, Vietnam still needs to import sugar.

What Are the Changes in Thai Anti-Dumping Duties? 

  • Previously, Thai sugar imports incurred a 48.88% duty for whites and a 33.88% duty for raws.
  • These were designed to prevent cheaper Thai sugar flooding their domestic market.
  • With the latest review on 15th Jun’21, the Vietnamese government revised the duties to 47.64% for both raws and whites on top of the 5% ASEAN preferential duty.
  • The anti-dumping duties are now valid for the next 5 years.
  • Based on the latest duties, the import margin for Thai sugar is negative (-80 USD/mt for raws and -68 USD/mt for refined).

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Note: Sugar Imports from ASEAN Members Face 5% Duty

  • As such, Vietnam needs to continue importing sugar from Malaysia and Indonesia to supply to their domestic market.
  • Malaysia and Indonesia should be able to export 360kmt collectively, leaving the vast majority of Vietnam’s demand unsatisfied.
  • Currently, Vietnam has already imported 39k tonnes from Malaysia and 52k tonnes from Indonesia.

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  • Meanwhile, given the Thai anti-dumping duties remain, it is likely that the domestic price will continue to remain supported.

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Vietnam’s Sugar Imports Slow Right Down 

  • Since the duties were introduced in February, sugar imports to Vietnam have fallen.
  • Vietnam has imported 278k tonnes of Thai sugar this season, down 31% year-on-year.

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 Note: May’s refined sugar export data has not been published yet. 

  • However, its sugar production is at a 10-year low as many farmers have switched to planting pineapples to earn more money.
  • This means it will have 1m tonnes less sugar than it needs to satisfy consumption.

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  • Last season, almost all of Vietnam’s sugar came from Thailand, so it needs to find new suppliers, and fast.
  • We’ve seen sugar smuggling via Cambodia accelerate over the last couple of months.
  • This should continue, given the latest change in the anti-dumping duties.
  • However, Cambodia’s recent spike in COVID cases means border control is tight at present, making smuggling more of a challenge.

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  • This means Vietnam will continue to need imports from ASEAN origins, like Malaysia and Indonesia, although they’ll be unable to cover Vietnam’s entire deficit.

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Celest Koh

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