Weather conditions in recent months have delayed the Vietnamese sugarcane harvest, causing a shortage in key raw material for food makers.
The shortage pushed prices up to record highs in December but they have started to move downwards, according to the local media.
In Ho Chi Minh city, the refined sugar price declined VND1,000 - 1,600 for 1 kg compared to last week, according to Vietnam News. Sugar from Thanh Cong and My Tho costs VND10,400 per kg, whereas Bien Hoa sugar is selling for VND10,000-10,600, down VND1,000 since last week, it reported.
It is thought that prices are falling due to the government's decision to allow 40,000 tonnes of refined sugar to be imported up until January 20. The Ministry of Trade said it would also reduce the import tax to 20 per cent, instead of the normal 40 per cent.
Six firms have been selected to import sugar, most likely from Thailand, because of its closeness, although it is unclear whether any of the imports have yet reached Vietnam.
Imported sugar from Thailand currently costs US$410 per tonne, $57 more per tonne than imports from Northern Europe, and Thailand is also experiencing shortages in domestic production.
Vietnam's new crop has however reached mills and supply will significantly increase shortly. Demand is expected to remain high however, particularly with the Tet holidays approaching at the end of the month.
During Tet, consumption of sweets and sugary foods rises dramatically.