The 2025/26 sugar season in Vietnam is drawing to a close, with total production reaching approximately 1.3 million tonnes, according to the latest data released by the Vietnam Sugar Association (VSA). Most mills have finished crushing, with only a few late-starting factories in the central region still operating. The season has seen about 13.3 million tonnes of sugarcane processed, maintaining output stability. However, this production stability contrasts sharply with persistently weak domestic consumption, as sugar prices have fallen to their lowest level in three years and are now the lowest among major regional producers.
Vietnamese Sugar Prices are Significantly Lower than Neighboring Countries
The VSA reports that the domestic market is well-supplied, not only by local cane sugar but also by imports from ASEAN countries, alongside an unquantifiable volume of smuggled sugar and sugar of unknown origin. This oversupply continues to depress local prices. In June 2026, sugar prices in Hanoi, the central region, and Ho Chi Minh City remained low. White sugar was trading between 15,600 and 16,200 Vietnamese Dong per kilogram, while refined sugar was priced between 16,900 and 17,200 VND/kg. According to VSA calculations, the average Vietnamese sugar price is about 16,505 VND/kg. In comparison, the price in the Philippines is approximately 27,315 VND/kg (165% of Vietnam's price), Indonesia is around 26,946 VND/kg (163%), and China is about 19,646 VND/kg (119%). This makes Vietnam the cheapest sugar market among these key regional players. Despite the competitive pricing and high quality of domestic cane sugar, sales volumes in June fell to multi-year lows, indicating that low prices are not effectively stimulating consumption or reducing inventory.
Smuggled and Untraceable Sugar Squeezes the Market
The VSA believes that the difficulty in selling domestic sugar is not solely due to oversupply but is closely linked to smuggling, commercial fraud, and untaxed transactions. A significant amount of sugar of unknown origin is still being sold openly through social media, wholesale markets, and retail channels. These transactions are often cash-based and without invoices to hide revenue and evade taxes, placing legitimate sugar mills and distributors at a competitive disadvantage regarding tax burdens, traceability, and operational costs. In June 2026, authorities in Quang Tri province seized three shipments of untraceable white sugar on National Highway 9, totaling about 6 tonnes, all lacking legal invoices and proof of origin. VSA Chairman Nguyen Van Loc stated that the market still widely sees repackaged sugar with no labels, no origin, or expiration dates being sold. Many final points of sale use cash transactions without invoices, further complicating market oversight. Notably, even as domestic cane sugar prices fall to levels close to or below some smuggled sugar, legitimate products struggle to secure stable sales, proving that competition is now influenced by factors beyond price, including tax, distribution channels, and regulatory costs.
HFCS Continues to Erode Industrial Sugar Demand
Beyond smuggled sugar, high-fructose corn syrup (HFCS) is also squeezing Vietnam's industrial sugar market. Vietnamese customs data shows that the country imported about 22,200 tonnes of HFCS in June 2026, with total imports for the first half of the year reaching approximately 111,800 tonnes, roughly flat year-on-year. These imports are primarily used by beverage manufacturers, which were once major customers for Vietnamese refined sugar. As HFCS usage in soft drinks and food processing increases, the industrial consumption space for traditional white and refined sugar is shrinking. The VSA has stated that the industrial sugar market for the beverage industry has been largely captured by HFCS, while the consumer market is under attack from smuggled sugar. This creates a dual squeeze on domestic cane sugar from both the industrial and retail sides.
Low Sugar Prices Threaten the Stability of the Sugarcane Chain
Looking ahead, the VSA expects market supply to remain ample from July to August 2026. Domestic sugar, ASEAN imports, and smuggled sugar will continue to coexist, with no clear signs of improvement in cane sugar consumption. Domestic prices are likely to stay near their three-year lows. The association warns that persistently low prices, the lowest in the region, have already impacted sugarcane procurement prices. Current sugarcane purchase prices in Vietnam are only 60% to 70% of those in some neighboring countries, leaving some farmers unable to cover their production costs. If issues such as smuggled sugar, untaxed operations, and HFCS substitution are not effectively addressed in the long term, farmers may reduce planting areas. This would impact raw material supply and mill utilization rates, ultimately threatening the stability of the entire Vietnamese sugarcane cultivation, processing, and distribution chain.
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