Vietnamese companies will be allowed to import 70,000 tonnes of sugar this year despite sufficient supply in the domestic market in order to keep up with WTO commitments.

The quota has been decided by the Ministry of Agriculture Rural Development and the Ministry of Industry and Trade after studying the yield of the 2011-12 crop and current inventory volumes, said Nguyen Bai Duong, an agriculture ministry official.

Duong told Vietnam News that the quota confirmed the ministry's prediction at the beginning of the year.

"We have submitted to the Prime Minister the criteria applied as well as the list of companies wanting to import sugar to serve their production," Duong said.

He reaffirmed that the country is not facing a sugar shortage.

The general secretary of the Vietnam Sugar and Sugarcane Association, Nguyen Hai, echoed Duong, saying domestic sugar plants can "absolutely meet the demand from companies".

"The country produced nearly 1.4 million tonnes of sugar in the 2011-12 crop and the inventory volume as of July 31 is 230,000 tonnes.

Meanwhile, we estimate consumption this year at between 1.3 million and 1.4 million tonnes," Hai told Vietnam News.

Furthermore, he added, the new crop will start from the beginning of this September, reducing the chances further of any sugar shortage.

"The import quota of 70,000 tonnes is on par with the country's commitment with the World Trade Organisation," he said.

Hai also revealed that domestic sugar consumption in current months has slowed down to about 60,000 tonnes of sugar each month compared to the normal 110,000 tonnes. He attributed the slow consumption to illegal imports.

"Illegal imports have become uncontrollable," he said, explaining that companies that are allowed to import sugar are either re-exporting it or selling it in the domestic market instead of sing it for production.

"Meanwhile, domestically-produced sugar is less competitive because of high prices."

To solve the problem, the association has called on the Government to scrap its system of setting individual sugar import quotas for companies.

"Once the Government has decided the export quota, they should invite bids from companies," Hai said.-VNA