The ministry has been accepting applications for the auction following years of pressure from the Vietnam Sugar and Sugarcane Association, which criticised the current system for being unfair. The sale will take place on September 7.
Until now, food and beverage companies were entitled to their quotas through a licensing system that did not involve bidding. Companies would compete fiercely for these licenses as imported sugar costs less than domestic products.
Under the new system, sugar companies will be allowed to bid for import rights for up to 40,000 tons of raw sugar. Manufacturers of confectionary and soft drinks will be able to bid for up to 45,000 tons of refined sugar separately.
The government will bank the difference between the bid amounts and prices.
Drought earlier this year, which damaged around 7% of Vietnam’s sugarcane crop, has resulted in a 12,7% drop in output to 1.24m tons.
Sugar prices have grown strongly in Vietnam over recent months to VND7,000-7,500 (US$0.31-0.34) per kilogram.