{"id":568,"date":"2026-03-20T14:58:25","date_gmt":"2026-03-20T05:58:25","guid":{"rendered":"https:\/\/vietnam-agri.com\/vietnam-agri\/vietnam-sugarcane-industry\/"},"modified":"2026-06-10T00:34:07","modified_gmt":"2026-06-09T15:34:07","slug":"vietnam-sugarcane-industry","status":"publish","type":"post","link":"https:\/\/vietnam-agri.com\/en\/vietnam-agri\/vietnam-sugarcane-industry\/","title":{"rendered":"A thorough explanation of Vietnam's sugarcane and sugar-refining industry"},"content":{"rendered":"

Many people may be wondering, 'What is happening with Vietnam's sugar industry now?'<\/p>\n

Although it is one of ASEAN's leading agricultural countries, Vietnam's sugar industry faces structural challenges. The reality is that domestic production cannot keep up with demand, so the country has to rely on imports.<\/p>\n

This article explains in detail the current state of Vietnam's sugarcane production, its main growing regions, the structure of domestic demand and imports, the ATIGA tariff issue, and trends in industry restructuring.<\/p>\n

The Current State of Vietnam's Sugarcane Production<\/h2>\n

Vietnam is one of Southeast Asia's leading agricultural countries, but in sugarcane production, challenges stand out.<\/p>\n

The sugarcane planting area in the 2022-2023 season was about 150,000 hectares. This is close to half the level of the peak in the first half of the 2010s (about 300,000 hectares).<\/p>\n

Production hovers around 8 to 9 million tonnes a year, or roughly 800,000 to 1 million tonnes in refined-sugar equivalent. Domestic demand, meanwhile, is said to be about 2 million tonnes a year, so by simple calculation the country relies on imports for more than half of its demand.<\/p>\n

For farmers, sugarcane tends to be shunned as a low-profit crop. It takes 10 to 12 months to harvest, and with difficulties in sugar-content management and a lag in mechanization, switching to other cash crops is advancing.<\/p>\n

Where Are the Main Growing Regions? Characteristics by Area<\/h2>\n

Vietnam's sugarcane growing regions are broadly divided into three areas.<\/p>\n\n\n\n\n\n\n\n
Regions<\/th>\nMajor Provinces<\/th>\nCharacteristics<\/th>\n<\/tr>\n<\/thead>\n
Northern and Central Highlands<\/td>\nHoa Binh, Thanh Hoa<\/td>\nCultivation on sloped land; yields are somewhat low<\/td>\n<\/tr>\n
Central<\/td>\nQuang Ngai, Phu Yen<\/td>\nTraditional production areas with a concentration of sugar mills<\/td>\n<\/tr>\n
South<\/td>\nLong An, Tay Ninh<\/td>\nFlat land; large-scale operations are relatively advanced<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Among these, Thanh Hoa and Phu Yen provinces are areas where many of Vietnam's domestic sugar mills are concentrated. However, in recent years the aging of farmers and the outflow of young people to cities have weakened the production base.<\/p>\n

Tay Ninh province in the south is close to the Cambodian border, and sugar smuggling was once a serious problem. Since the introduction of ATIGA tariffs, that structure has been changing, but it remains an area that needs attention.<\/p>\n

The Structure of Domestic Demand and Import Dependence<\/h2>\n

Vietnam's domestic sugar demand is steadily rising, driven by population growth and the expansion of the food-processing industry.<\/p>\n

Demand from beverage, confectionery and processed-food makers is especially strong, and industrial-use sugar consumption is said to account for nearly 70% of the total.<\/p>\n

Because domestic production cannot cover demand, imports from Thailand have become the mainstay. Thailand is one of the world's leading sugar exporters and has strong price competitiveness within ASEAN. Many of the sugar products on Vietnamese supermarket shelves are from Thailand or made with imported raw material.<\/p>\n

The share of imported sugar varies by year, but in recent years about 30-50% of domestically refined sugar is said to be based on imported raw sugar.<\/p>\n

The Shock Delivered by the ATIGA Tariff Issue<\/h2>\n

What brought a major turning point to Vietnam's sugar industry was the tariff abolition under ATIGA (the ASEAN Trade in Goods Agreement).<\/p>\n

In January 2020, in line with ATIGA's provisions, Vietnam lowered its import tariff on sugar from ASEAN member countries to 5%. Before that, it had protected the domestic industry with a high tariff of 85%, so this change dealt a heavy blow to the sugar industry.<\/p>\n

As large volumes of Thai sugar flowed in, domestic sugar prices plunged. Many sugar mills fell below break-even, and since 2020 several mills have been forced to halt operations or close.<\/p>\n

In 2021, the Vietnamese government took countermeasures, imposing anti-dumping and countervailing duties on Thai sugar (33.88-47.64% in total). These measures temporarily curbed import volumes. However, debate over consistency with WTO rules continues, so the situation remains uncertain.<\/p>\n

Trends in Industry Restructuring and Modernization<\/h2>\n

Prompted by the ATIGA issue, Vietnam's sugar industry has entered a period of full-scale restructuring.<\/p>\n

Consolidation of Mills Is Accelerating<\/h3>\n

In the 2010s, about 40 sugar mills operated nationwide, but now the number has fallen to around 25. Small and medium, inefficient mills are being weeded out, and production is heading toward consolidation among companies with the staying power.<\/p>\n

A leading player is the TTC (Thanh Thanh Cong) Group, known as the largest in the country. Centered in the south, it operates several mills and runs an integrated business from sugar manufacturing to sales.<\/p>\n

Improving Farming Technology and Introducing High-Sugar Varieties<\/h3>\n

The Vietnamese government and international institutions are promoting the spread of high-sugar varieties and farm mechanization. The introduction of new varieties with 15-20% higher sugar content than conventional ones is advancing in some growing regions.<\/p>\n

Subsidies for introducing harvesting machinery and technical training for farmers are also being provided, aiming to cut production costs. However, spreading them to mountainous areas and small farmers is expected to take time.<\/p>\n

Diversifying into Bioethanol<\/h3>\n

Producing bioethanol using sugarcane bagasse (the crushed residue) and entering the power-generation business are also drawing attention. Breaking away from a sugar-only approach has become the key to corporate survival.<\/p>\n

Relations with Japan and Implications for Food Importers<\/h2>\n

Vietnam's sugar industry is not unrelated to Japanese food importers either.<\/p>\n

When sourcing Vietnamese processed foods and beverages, where the raw sugar comes from is an issue that directly affects cost and quality control. The inflow of Thai sugar and changes in tariff measures also affect the prices of Vietnamese products.<\/p>\n

Also, for Japanese companies doing agriculture-related business in Vietnam, changes in land use in sugarcane growing regions affect the sourcing environment for surrounding farm products. Trends in crop switching in highland areas (to coffee, vegetables and fruit) in particular are worth watching.<\/p>\n

Summary<\/h2>\n

The current state of Vietnam's sugarcane and sugar industry can be summarized as follows.<\/p>\n