Indonesian Business Group Says More Sugar Imports Needed to Secure Supply

By webadmin on 11:40 pm Aug 15, 2010
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Indonesia. Businesses producing sugar-based products are calling on the government to import an additional 700,000 tons of raw crystal sugar to anticipate a shortage this year due to bad weather.

Adhi S Lukman, chairman of the Food and Beverage Businessmen Association (Gapmi), said on Friday that the country’s sugar need for industry and consumption was estimated at five million tons this year.

However, sugar production is projected at 2.1 million tons due to the extended rainy season, down from a previous projection of 2.7 million tons. Including the 2.2 million tons of imports scheduled this year, the total projected stock is now at 4.3 million tons.

Lukman said the government should have come up with an additional import plan earlier to secure this year’s stock and to prevent manipulation of sugar prices that could put sugarcane farmers at risk.

But Trade Minister Mari Elka Pangestu said the nationwide stock for 2010 was secure.

The government plans to import sugar, but is aiming to secure the stock for the first five months of 2011 as the prolonged wet season is predicted to hurt this year’s production and affect next year’s, the minister said.

“The import plan is aimed more at meeting next year’s needs in the face of a fall in domestic sugar production,” Mari said on Friday.

She said imports were especially needed to meet the demand for sugar in early 2011.

“Production this year is predicted to be lower than last year” because of the unusually heavy rains, she said.

But Mari said current stocks were enough to meet the need for sugar in the current fasting month and during the post-Ramadan Idul Fitri holiday.

Even though Indonesia is an agricultural country, the government has to import sugar every year to meet domestic need.

In September last year, the government said it would import 180,000 tons of raw sugar to increase its sugar stocks and to secure sugar supplies in the country in the first five months of 2010.

In 2009, the government allocated 1.6 million tons of raw sugar imports for refined sugar industries, and imported 380,000 tons of refined sugar.

Indonesia hopes to become sugar self-sufficient but needs another 350,000 hectares of working sugar plantations to reach that goal.

Indonesia’s sugarcane plantations at present cover about 480,148 hectares, up only marginally from the 344,795 hectares in 2004.

According to a government survey, the country now has about 7.3 million hectares of idle land, Agriculture Minister Suswono said.

Nearly two million hectares of the land could be used as farmland including sugarcane plantations, he said.