Association calls for higher duty on sugar<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
The Indonesian Sugar Association has renewed calls on the
\ngovernment to raise the import duty on sugar imports to protect
\nlocal producers as many other countries do including European
\ncountries and the United States.<\/p>\n
Association chairman Farukh Bakri asked the government to
\nraise the import duty to at least 65 percent.<\/p>\n
This was still much lower than the import duties imposed by
\nmany countries, Farukh said, citing that the European countries
\nimposed a 240 percent import duty on the commodity, the United
\nStates 150 percent. Neighboring countries, Thailand and the
\nPhilippines imposed an import duty of between 95 and 100 percent.<\/p>\n
\"Indonesia is one of the countries with the lowest import duty
\non sugar,\" Farukh said.<\/p>\n
The country's import duty on sugar now stands between 20
\npercent and 25 percent -- a level agreed upon in 2000 by the
\ngovernment and the International Monetary Fund (IMF), which has
\nprovided billions of dollars to Indonesia to help it recover from
\nthe economic crisis.<\/p>\n
In 1998, the government set a zero duty on the commodity at
\nthe request of the IMF, which seeks to impose a free-market
\nsystem in the country's economy. The move was welcomed by many
\nanalysts who believed the policy would force the local industry
\nto improve its efficiency.<\/p>\n
The country's sugar industry is dominated by state-owned firms
\nthat mostly use antiquated machinery.<\/p>\n
According to Farukh, at least 12 sugar mills have stopped
\noperation since in 1998 mainly due the high production costs and
\nthe influx of cheaper imported sugar.<\/p>\n
Such conditions have made Indonesia Southeast Asia's largest
\nsugar importer, he said.<\/p>\n
The country's total production now reaches 1.7 million tons
\nwith an annual consumption of about 3.3 million tons. Indonesia
\nimported around 2.1 million tons of sugar in 1999, 1.2 million in
\n2000 and about 1.6 million last year.<\/p>\n
Farukh said the country's sugar industry was now on the brink
\nof bankruptcy and that the government should move to help it.<\/p>\n
Farukh suggested that the proposed 65 percent import duty
\ncollected by the government be used to help the industry and
\nbuild new plants to enable the country to become self-reliant in
\nsugar in the future.<\/p>\n
Using the funds, the country would be able to build about 20
\nnew sugar plants within eight years, each of them with a capacity
\nof 12,000 million tons a day.<\/p>\n
Farukh said the association had talked with the IMF and the
\nFund was not opposed to the proposal of raising the import duty
\non sugar as long as the duty earnings were used for programs to
\nboost the country's sugar production.<\/p>\n
Pressure on the government to raise the sugar import duty also
\ncame from local sugarcane farmers, who launched a demonstration
\nlast month, during which they dumped tons of sugar at the
\nMinistry of Industry and Trade. They demanded the government
\nimpose an import duty of 110 percent.<\/p>\n
Minister of Industry and Trade Rini M. Soewandi, however,
\nrejected the call, saying that raising the import tariff would
\nboost sugar prices at home and create a heavy burden on
\nconsumers.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/association-calls-for-higher-duty-on-sugar-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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