Government increases import quota for raw sugar

"To cover production deficiency, we have to import and process it into white sugar. The quota was given to producers, and during the first stage, we will import 400,000 tons of raw sugar," Lukita said.
Jakarta (ANTARA News) - The government has increased the import quota of raw sugar by 400,000 tons to meet domestic consumption following declining production in the country.

Trade Minister Enggartiasto Lukita stated here on Monday that additional sugar imports, which would be offered to eight refineries, has yet to take into account the demand for the domestic food and beverage industry.

"To cover production deficiency, we have to import and process it into white sugar. The quota was given to producers, and during the first stage, we will import 400,000 tons of raw sugar," Lukita noted.

Domestic sugar consumption is expected to reach 3.2 to 3.5 million tons per year, with minimum consumption forecast at 250,000 tons per month.

With domestic sugarcane production at 2.1 million tons per year, the government will need to cover the lack in supply by up to one million tons per year.

The government has set the ceiling price for white sugar at Rp12,500 per kilogram (kg) based on the agreement reached between the producers and distributors.

The additional raw sugar import has yet to be included in the demand for the food and beverage industry, which already has the license to import 1.5 million tons of raw sugar.

"This is apart from (the import quota) for the food and beverage industry. We will prevent stocks of (raw sugar), meant for the food and beverage industry, from reaching the consumer market," Lukita emphasized.

In 2016, the government had tasked Perusahaan Perdagangan Indonesia (PPI) Persero, the state logistic agency (Bulog), and PT Perkebunan Nusantara (PTPN) with covering the supply shortages.

However, in 2017, the government will grant licenses directly to the producers and distributors.

In 2016, the government had tasked Bulog with importing 260,000 tons of raw sugar; PTPN X, 114,000 tons; and PPI, 190,000 tons of raw sugar.

Of the total import quota for PTPN X, the product was processed by PTPN IX, PTPN X, PTPN XI, PTPN XII, PT PG Rajawali I, and PT PG Rajawali II.

According to the government, the import scheme for raw sugar to be processed into white sugar would not be adopted permanently. The move was made to fulfill the current demand, while boosting the domestic sugar industry.

"Our aim is to become independent, but we cannot reach the target since sugar refineries are still facing the problem of shortages in sugarcane supply. We want state enterprises to increase the quality and quantity of their products in efficient ways," he added.

As of January, the domestic sugar price was recorded at Rp14,087 per kg, a decline of 0.33 percent as compared to Rp14,133 per kg in December last year, while the government has targeted to reduce the price to Rp12,500 per kg.(*)

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