Prices of standard refined sugar (RS) were quoted at VND15,800-16,600 per kg, while refined white sugar (RE) traded at around VND17,000-17,600 per kg. The sharp decline, estimated at roughly VND3,000 per kg compared with previous peak levels, is placing significant pressure on the domestic sugar industry. Industry participants warn that persistently low prices could disrupt the production chain linking sugar mills and sugarcane farmers as profit margins continue to narrow.

According to the latest report from the Vietnam Sugarcane and Sugar Association (VSSA), domestic sugar mills had largely completed the 2025/26 crushing season by mid-May 2026. Cumulative figures as of April 30 showed that the industry had processed approximately 11.106 million tonnes of sugarcane, producing around 1.06 million tonnes of sugar.

Overall, domestic sugar supplies remain abundant, supported by output from the latest harvest as well as inventories carried over from the previous season.

Despite the onset of summer, traditionally the peak consumption season for sugar-intensive industries such as beverages and ice cream, demand for domestically produced cane sugar is expected to remain at historically low levels. The main reason is that food and beverage manufacturers are increasingly opting for imported high-fructose corn syrup (HFCS), which offers a lower-cost alternative to cane sugar.

Based on updated market data released by the VSSA through mid-May 2026, Vietnam's sugar market is expected to remain under pressure through late May and June. Market participants are likely to face continued challenges arising from localized oversupply, prompting calls for urgent measures to safeguard the industry's production chain.

Weak demand and low selling prices are forcing sugar mills to consider lowering procurement prices for sugarcane. Such a move could directly affect the livelihoods of tens of thousands of farming households and raise concerns over a potential contraction in sugarcane cultivation areas in the coming seasons.

Industry representatives have proposed that policymakers expand the scope of the special consumption tax on sweetened beverages to cover products containing all forms of free sugars, including high-fructose corn syrup (HFCS). They argue that such a measure would help create a more level playing field between domestically produced cane sugar and imported sweetener products.

To offset shrinking profit margins from sugar production, experts recommend that sugar producers accelerate investment in value-added processing technologies and maximize the utilization of sugar industry by-products. Potential opportunities include generating biomass electricity from bagasse, producing ethanol and industrial alcohol from molasses, and manufacturing organic and bio-fertilizers.

Diversifying revenue streams through these activities would help reduce the industry's dependence on sugar prices and strengthen the long-term sustainability of Vietnam's sugar sector amid increasingly volatile market conditions.

Source: Vitic