Recover position for sugarcane: Rising from hardship

The sugarcane industry was struggling

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Recover position for sugarcane: 'Capital' of sugarcane struggles to regain the golden age

An Khe Sugar Factory is a unit under Quang Ngai Sugar Joint Stock Company, established on October 22, 2000. At the end of 2001, the factory officially went into operation with a capacity of 2,000 tons of sugarcane per day. During its operation, An Khe Sugar Factory continuously develops sugarcane raw material areas and invests in modern machinery and equipment. By 2024, Quang Ngai Sugar Joint Stock Company aims to increase the capacity of An Khe Sugar Factory to 20,000–25,000 tons/day, a remarkable development.

To get to this day, An Khe Sugar Factory had to go through extremely difficult times. According to Mr. Nguyen Hoang Phuoc, Deputy Director of An Khe Sugar Factory, entering the 2017–2018 crushing crop year, the domestic sugarcane industry began to face an unprecedented crisis.

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Recover position for sugarcane: Farmers increasingly turn away

In the 2016–2017 crushing crop year, the sugarcane area in the Dong Gia Lai raw material area of An Khe Sugar Factory in the districts of Kbang, Dak Po, Kong Chro, and An Khe town was up to 30,000 ha, reaching an average productivity of 73.4 tons/ha. The factory purchased and crushed 1,964,000 tons of raw sugarcane, producing more than 203,000 tons of sugar.

“However, entering the 2017–2018 crop year, the domestic sugarcane industry began to face a situation of oversupply. Therefore, the domestic sugar price decreased sharply from VND 14,000–15,000/kg to only VND 9,000–10,000/kg, down 45–50%. At this time, smuggled sugar rushed into Vietnam, especially Thai sugar, leading to a decrease in raw sugarcane prices," Mr. Nguyen Hoang Phuoc recalled.

Faced with the above situation, farmers began to turn their backs on sugarcane, and the area of raw sugarcane nationwide decreased from about 300,000 ha to only 150,000 ha. The wave of "killing" domestic sugar factories also massively spread to localities. 50 operating sugar factories rapidly dropped to only 26 "weakly" operating factories and 24 "dead" factories in the midst of market fluctuations.

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Recover position for sugarcane: High prices, farmers are still not happy

An Khe Sugar Factory is no exception; the sugarcane raw material area stable at 30,000 ha sharply reduced to only 17,500 ha. The average sugarcane yield, which was stable at 73.4 tons/ha, also decreased to only 45 tons/ha. The reason is that there were heavy losses in growing sugar cane, so sugar cane fell into disgrace. Sugarcane growers were no longer concerned about investing in sugarcane, so productivity also dropped quickly.

In addition, at that time, in the area of Dong Gia Lai, there was a severe drought, so sugarcane could not grow. Next, the COVID-19 pandemic raged like a "fatal knife,” causing Gia Lai sugarcane "to die." Accordingly, the crushing output of An Khe Sugar Factory continuously plummeted from 1,964,000 tons in 2016 to 1,450,000 tons in 2017 and 900,000 tons in 2018. As well as 26 domestic sugar factories holding out, An Khe Sugar Factory fell into an extremely difficult situation during this period.

“Faced with the above situation, the managing unit of An Khe Sugar Factory, Quang Ngai Sugar Joint Stock Company, especially Mr. Vo Thanh Dang, Chairman of the Board of Directors and General Director of the Company, has urgently proposed many policies supporting sugarcane growers with the determination to revive the factory's operations, especially rebuilding the Dong Gia Lai sugarcane raw material area," said Mr. Nguyen Hoang Phuoc, Deputy Director of An Khe Sugar Factory.

Introducing many policies to restore the raw material area

In the difficult context, General Director Vo Thanh Dang identified: The sugarcane raw material area and domestic sugar factories still in operation have both decreased by half, so of course, in the coming time, domestic sugar prices will gradually recover, stabilize, and reach a high level in the 2022–2025 period. The weather in the Dong Gia Lai region will also be less harsh, with more rain, so it will be favorable for restoring the raw material area.

To restore the Dong Gia Lai sugarcane raw material area, An Khe Sugar Factory introduced a policy to insure the prices of sugarcane (10 CCS) purchased at the field at a stable level of VND 900,000/ton.This insurance level will be maintained from 2020 to 2025.

In addition, An Khe Sugar Factory continues to invest heavily in farmers, from the soil tillage stage to the planting stage. Particularly, Quang Ngai Sugar Joint Stock Company has its own department specializing in researching new sugarcane varieties with high yield and quality to put into production to improve sugarcane productivity in the raw material area. The unit also invests in fertilizer for farmers throughout the crop without interest.

An Khe Sugar Factory also has many other policies to invest in the areas of large sugarcane production fields. Invest over VND 20 billion/year in mechanization and wells to irrigate sugarcane during the dry season. Invest in additional equipment on the production line to meet production needs when the sugarcane area gradually increases each year. Thanks to that, the factory's crushing capacity increased steadily from 15,000 tons of raw sugarcane per day to 17,000 tons/day as of today. Especially, the price of raw sugarcane purchased by An Khe Sugar Factory is applied according to the actual price of sugar on the market.

Along with that, the decisions of the Government and the Ministry of Industry and Trade on anti-dumping, anti-tax avoidance, and anti-smuggled sugar have also contributed to helping the domestic sugarcane industry gradually recover.

Under the drastic instructions of Mr. Vo Thanh Dang, in the last 3 crops, the Dong Gia Lai sugarcane raw material area of An Khe Sugar Factory has gradually increased. In the 2020–2021 crop year, the sugarcane area in this raw material area only reached 17,500 ha, with an average productivity of 46 tons/ha and an output purchased by the factory of 900,000 tons/crop. But, in the 2021–2022 crop year, the sugarcane area in the raw material area has increased to 21,500 ha; the average productivity reached 63 tons/ha, and the output purchased by the factory was 1.1 million tons/crop.

Entering the 2022–2023 crop year, the sugarcane area in the raw material area continued to increase to 27,000 ha, with an average productivity of 74.5 tons/ha and a purchased output of 1.7 million tons/crop. Most recently, in the 2023–2024 crop year, the sugarcane area in the raw material area continues to increase to 30,000 ha, with an average productivity of 77 tons/ha and a purchased output of 2 million tons/crop.

According to Mr. Tran Van Du, who is growing approximately 100 ha of sugarcane in An Thanh commune (Dak Po district, Gia Lai), in the last 3 years, sugarcane growers in Gia Lai have earned high profits. In the Dak Po raw material area, the root-regenerated sugarcane areas currently yield an average of 80 tons/ha, even over 100 tons/ha in some areas. At current prices, sugarcane growers earn an income of over VND 70 million/ha.

"Thanks to the high economic efficiency of sugarcane farming in recent years, people have increased the sugarcane growing area. The total sugarcane raw material area of Tu An Agricultural Cooperative (An Khe town, Gia Lai) has increased by 10%. The current area is about 10 ha, with 50 participants," said Mr. Le Van Bo, Director of Tu An Agricultural Cooperative.