Local sugar mill owners and sugar-cane farmers are demanding that refined sugar imports be stopped and that re-export permits for the commodity not be issued after sugar prices plunged to 10-year lows.
A drop in Chinese demand has not only left stocks piling up in warehouses, it has also caused refined sugar prices to fall to K960 a viss (1.6 kilogrammes), the price it was trading for in 2009.
China was the largest buyer of sugar from Myanmar from 2015 until mid-2017, when it stopped importing from the country. At the peak of China’s demand in 2016, 3 million tonnes of sugar were re-exported to the country from Myanmar.
Ma Su Su Hlaing, a sugar trader from Muse, in northern Shan State, said at a workshop in Mandalay recently that 160,000 tonnes of sugar has been stuck in Muse warehouses for a year and that costs to rent storage space has risen to K1.2 million a month.
She said traders want permission to sell in the local market as the quality of the sugar can decline if stored for too long.
They are also calling for refined sugar imports and the issuance of re-export permits to be stopped as temporary measures to halt the decline in prices. Meanwhile, sugar mill owners are also demanding that they be allowed to produce ethanol.
Notably, sugar-cane farmers have been affected as mills have not bought as much cane in the 2018-19 crushing season while those who bought have not paid the farmers on time.
An official from Great Wall Co Ltd, a Mandalay-based sugar mill owner, said the company’s plans to set up a sugar mill in Katha, Sagaing Region, has been postponed due to the fall in demand. “We used to sell 15,000 to 20,000 tonnes of sugar in previous years, now we sell 3,000 tonnes a month,” he said.
U Sein Myo Aung, from the Ngwe Yi Pale group, which owns sugar mills, coal mines and cement factories, said payments were made to farmers in June but that sugar was sitting in the warehouses because of low demand despite government efforts to export to China.
Ngwe Yi Pale contracted 7000 farmers for 23,500 hectares of sugar-cane plantations. U Sein Myo Aung said K9 billion has been paid to these farmers in June.
Meanwhile, Ministry of Agriculture, Livestock and Irrigation director Daw Yi Yi Mon said an upcoming sugar forum this September could find a solution to the woes affecting the industry.
She said a strategy to support the industry was needed and that collecting data on the sugar consumption of the local food industry would help. “We’re collecting data on sugar consumption rates in the country and implementing regulations to limit refined sugar imports,” Daw Yi Yi Mon added.