Indonesia Cuts Duties on Sugar Imports to Cool Domestic Prices

Indonesia, Southeast Asia’s largest buyer of sugar, cut duties on imports of the sweetener in a bid to cool domestic prices, which have surged this year.

The tax on raw sugar was cut to 150 rupiah (2 U.S. cents) a kilogram from 550 rupiah, according to a copy of the Sept. 24 regulation issued by Finance Minister Sri Mulyani Indrawati, posted on the ministry’s Web site yesterday. The duty on white sugar was lowered to 400 rupiah a kilogram from 790 rupiah.

Indonesian refineries said on Sept. 16 they will import an additional 445,000 metric tons of raw sugar by December to lower local prices.

Sugar has doubled in New York this year after drought hurt cane production in India, the largest user, and heavy rains cut yields in Brazil, the biggest producer. Raw sugar touched 25.43 cents a pound on ICE Futures US in New York yesterday, the highest since Feb. 20, 1981.

Indonesia’s sugar industry is regulated by the government, which sets import quotas. Households buy sugar made from cane grown by local farmers, while industrial users import refined sugar directly, or buy from domestic processors, which import raw sugar.

source: bloomberg