Indonesia to import 260,000 tons of raw sugar

The Trade Ministry has issued permits to import 260,000 tons of raw sugar to meet domestic demand for raw sugar in the first half of next year, an official has said.

The Trade Ministry’s import director Arlinda said over the weekend that the ministry had granted the permits to import the raw sugar, saying that the permits were “valid until January next year”.

“The companies including [state-run plantation firms] PT Perkebunan Nusantara IX and PT Perkebunan Nusantara X, as well as PT Industri Gula Nusantara,” she said as quoted by Bloomberg.

Currently Indonesia, Southeast Asia’s largest sugar consumer, has two types of sugar industry. The white-crystal sugar industry uses sugarcane from local plantations as a raw material, while the refined sugar industry uses imported raw sugar.

Trade Ministry Regulation No. 111/2009 specifies that the refined-sugar industry can distribute their product only to the food and beverages industry and not to the consumer market, as the latter is
reserved for the white-crystal sugar industry.

However, earlier this year, the Agriculture Ministry requested that the Trade Ministry grant the import permits for raw sugar to four state plantation firms and three privately-owned companies to fill the projected white-sugar shortage outside the milling season next year, which is in the January–July period

“The seven companies, including four state firms, have said that they will be able to produce white sugar by using imported raw sugar as a raw material,” the Agriculture Ministry’s director general for plantations Gamal Natsir told The Jakarta Post over the weekend.

He added that the ideal amount of white crystal sugar stocks at each year end was 1.1 million tons, which, according to him, would be achieved by granting the raw-sugar import permits.

The Agriculture Ministry recommended the Trade Ministry grant permits to import raw sugar to state plantation firms PT Perkebunan Nusantara (PTPN) II for 47,500 tons, PTPN VII (7,500 tons), PTPN IX (40,000 tons), PTPN X (20,000 tons) and PTPN XI (10,000 tons).

In addition, the four private companies that were recommended by the Agriculture Ministry comprise PT PG Gorontalo for 47,500 tons, PT Pemuka Sakti Manis Indah (20,000 tons), PT Industri Gula Nusantara (50,000 tons) and PT Madu Baru (20,000 tons).

The decision to import sugar has always been problematic for the government as local farmers continue to suffer from limited incomes.

Sugarcane Smallholder Farmers Association member Soemitro Samadikoen said that the issuance of import permits had pushed the white sugar offering price to around Rp 9,300 (97 US cents) per kilogram, down by 11 percent from the offering price last month of Rp 10,500 per kilogram.

“How can Indonesia become a self-sufficient sugar producer if the spirit of the farmers is so often crushed like this?” he asked the Post over the phone.

He added that the government must keep an eye on the distribution of the white-sugar products that were produced using the imported raw sugar, saying that “it must only be sold during the harvest season so it will not harm farmers.”

Separately, an expert with the Indonesian Political Economic Association (AEPI), Khudori, said that in the long term, the government must always ensure that the amount of imported raw sugar did
not exceed the demand from industrial consumers such as the food and beverage, and pharmacy sectors.

source: thejakartapost