Vietnam's government has decided to impose a 47.64% duty on imported cane sugar originating from Thailand effective June 16, according to an official statement issued by the Vietnamese Industry and Trade Ministry seen by S&P Global Platts.
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The antidumping duty will remain valid for the next five years from the date of decision on June 15, according to the statement.
The Vietnamese government had previously announced in February a 33.88% duty to be charged on imports of Thai raw sugar into Vietnam, while imported Thai refined sugar would be levied at 48.88%, which would be valid for 90 days.
As per the latest regulation, both Thai raw and refined sugar will now face the same duty structure of 47.64% regardless.
Vietnam had in 2020 removed import taxes on ASEAN, or the Association of Southeast Asian Nations, sugar under the ASEAN Trade in Goods Agreement, or ATIGA. Under ATIGA, ASEAN sugar was supposed to only have a duty of 5%. However, a strong surge in Thai sugar imports by Vietnamese importers put pressure on Vietnamese domestic sugar prices and production.
Sugar shipments from Thailand to Vietnam between January-December 2020 was at 1.26 million mt, which was in stark contrast to the same period in 2019 when imports were only at 299,830 mt.
Buyers seek other ASEAN origins
Market sources said that such a move has paved the way for Vietnamese buyers to seek other ASEAN origin sugar, including Malaysia and Indonesia.
Vietnamese domestic refined sugar prices have been on the rise due to tighter inventory level within the country, with wholesale prices around Vietnamese Dong 16,800/kg ($730/mt) in June, up by almost 12%-15% from the first quarter of 2021
Another sugar trader noted that an implication of the antidumping duty would see increased Thai sugar moving into Vietnam via cross-border trucking activities, such as Laos or Cambodia.
"Vietnam will probably have to concentrate on [importing] other ASEAN origin sugar, but it will still not be enough," a Singapore-based sugar trader said.