Vietnam Sugar Market - Strategic Insights and Forecasts (2023-2028)

The Vietnam sugar market is projected to witness a compound annual growth rate of 3.78%, growing to US$2,141.508 million by 2028 from US$1,651.680 million in 2021.

According to the Vietnam Sugar and Sugarcane Association (VASA), 120,000 hectares of sugarcane were lost in 2016-21. In addition to it, as per FAOSTAT, sugarcane production declined from 16,313,144.85 tons in 2016 to 10,740,873.28 tons in 2021. However, a rebound in the Vietnamese sugar market is anticipated because of increased sugar prices and anti-dumping actions toward Thailand's cane products. According to the Food and Agriculture Organization of the United Nations, domestic sugar prices rose by 8–10% year-on-year in 2022 because of the global rise in sugar prices.

Vietnam Sugar Market Trends:

The decreasing production of refined or white sugar in the country is anticipated to boost imports to meet the consumption demand.

According to the March 2023 Food Processing Ingredients Report by the United States Department of Agriculture (USDA), the domestic production of refined or white sugar in the country declined significantly from 1,927 thousand tons in 2018 to 924 thousand tons by 2022. The declining trend of domestic white or refined sugar production in the country is anticipated to increase the projections of international penetration of foreign players, thereby increasing the scope for imports and overall market growth in the forecast period.

Vietnam Sugar Market Growth Factors:

At present, urbanization in Vietnam can be observed at a steady pace. For instance, the percentage of the population residing in urban regions reached 38% in 2021. Furthermore, the country has been following a long-term plan to diversify the tourism industry. According to the United Nations World Tourism Organization, Vietnam registered 18 million foreign tourists. It was the fifth most visited nation in the Asia-Pacific region. The expanding tourism sector has complemented the demand for sugar, as sugar is a vital ingredient in Vietnamese street food. As Vietnamese food is a major attraction in the nation, the tourism sector is also expected to propel the demand for the food and beverage industry.

Furthermore, Vietnam was the third-fastest-growing nation in Asia in terms of food expenditure, according to the 2020 report of the British Chamber of Commerce Vietnam. Additionally, as per the same source, food & beverages accounted for 35% of Vietnamese spending expenditures. With such a rise in food and beverage consumption, the sector's demand for and use of sugar for flavoring and sweetening purposes is also anticipated to rise, supporting the overall development of the Vietnam sugar market over the forecast period.

Furthermore, per the source, in FY 2022-23, the nation increased its 41 sugar factories to 67 for domestic production in 2022. The increasing number of sugar factories in the country is another strong factor in propelling the overall growth of the sugar industry, thereby pushing the white sugar market growth.

Vietnam Sugar Market Segment Analysis:

The liquid segment of the Vietnam sugar market will grow due to factors such as the growing food and beverage industry, increasing consumer demand for convenience, and the versatility of liquid sugar as a sweetener.

In addition to being a sweetener in typical baked goods and drinks, liquid sugar may be used in various products and applications, such as syrups, sauces, and marinades. Furthermore, the Vietnam sugar market has profited from the advantages of the global sugar price boom, with an average increase in sugar prices in the first quarter of 2021. Therefore, while the sector produced 611 thousand tons of sugar from 5.8 million tons of sugarcane in the first quarter of 2021, liquid sugar has emerged as an important commodity due to its convenience, adaptability, and increasing demand in the food and beverage industry.

Furthermore, according to Rogers Lantic in 2019, food manufacturers are converting more HFCS to liquid sugar because of the increased customer preference for liquid sugar over High Fructose Corn Syrup (HFCS). Therefore, the demand for liquid sugar in the food and beverage sector keeps growing, underlining its adaptability and customer acceptance.

Vietnam Sugar Market Scope: