Sugar Import Ban Still a Local Sweetener

As Indonesia seeks to maintain self-sufficiency in its sugar industry, the Trade Ministry said it would continue to protect the country’s sugar producers with an ongoing ban on imported sugar for domestic consumption.

The ban, which became effective in April, was only scheduled to last until Jan. 1, but over the weekend the ministry announced it would prolong it until this coming April when it would decide whether to continue the ban.

After years of failing to keep up with domestic demand, Achmad Mangga Barani, the general secretary to the Indonesian Sugar Council, or DGI, said on Monday that Indonesia became self-sufficient in plantation white sugar last year.

Indonesia’s sugar industry has struggled for decades, with small-scale farmers responsible for as much as 50 percent of output.

The 2008 Trade Ministry regulation stipulates that sugar can only be imported by registered or authorized importers. Refined and raw sugar can only be distributed for use by industrial firms such as food and beverage or pharmaceutical companies.

Raw sugar and refined sugar are used as raw materials in sugar production, while plantation white sugar can be consumed without further processing.

“Although it can be imported, refined sugar cannot be traded in the domestic markets, in order to protect locally produced plantation white sugar, as stipulated in the Trade Ministry’s regulations,” said Albert Yousuf Tobagu, the imports director at the ministry.

There are only seven refined sugar processing factories and 57 factories for producing plantation white sugar in Indonesia, according to data from the Industry Ministry.

In addition to the concern such figures hold in efforts to increase production, Albert said this month that his office received a request from the Agriculture Ministry to implement national quality standards for the sales of plantation white sugar, raw sugar and refined sugar.

According to a joint study by the Rural Industries Research and Development Corp. and the Australian Center for International Agricultural Research, inefficient farming practices and disruption of fertilizer supplies have limited productivity improvement. Cane yields, according to the paper, are around 73 tons per hectare compared with Australian yields of 95 tons in a normal season. Indonesia produced 2.74 million tons in 2008.

While total direct consumption of plantation white sugar was only about 2.7 million tons, this year the industry has targeted raising output to 2.85 million tons. The Indonesian Sugar Council’s Achmad said the government wanted to ensure self-sufficiency for both consumer and industrial needs through 2014 when demand is expected to reach 4.8 million tons.

“We set a target to no longer import refined and raw sugar for industrial purposes, since we would be able to produce it in the country,” he said.

The distribution, stocks and import of the three kinds of sugar is regulated and controlled by the Trade Ministry and the Industry Ministry, mainly to protect the stable production and distribution of plantation white sugar, Albert, the imports director, said.

“The production of plantation white sugar is our priority as this kind of sugar absorbed the biggest volumes of sugar cane provided by our local farmers,” he said.