The Ministry of Finance has decided to sharply increase import tax on sugar from January next year as local supplies are forecast to exceed demand.

The import tax on raw sugar would increase to 25 percent from 15 percent and on refined sugar to 40 percent from 15 percent, the ministry said.

The nation's 2012-13 crop was expected to yield around 1.5 million tonnes of sugar, roughly 100,000-200,000 tonnes higher than local demand.

In the domestic market, the sugar price was expected to fall by 1,000VND per kg over September to 20,000 VND per kg while the Ministry of Finance's Price Control Department forecast it would continue to fall.

In April last year, the ministry had to cut the import taxes on raw and refined sugar to 15 percent from 25 and 40 percent, because of concern that surging prices due to the increased demand and short supply would push inflation. The price was 24,000 VND before Tet last year with the local crop producing only 1 million tonnes of sugar.

Minister of Industry and Trade Vu Huy Hoang said Vietnam will import 100,000 tonnes of sugar this year because of the country's WTO commitment.

The ministry accepted an import quota of 70,000 tonnes in August, adding that it would work closely with the Ministry of Agriculture and Rural Development and the Vietnam Sugar Association to decide the most suitable time to grant sugar import quotas to avoid their impact on domestic production.

Source: VNA