Association reluctant to ban Australian sugar

Association reluctant to ban Australian sugar

JAKARTA (JP): The Indonesian Sugar Association (AGI) said on
Wedneday it opposed a plan to stop imports of raw sugar from
Australia.

"A boycott is a political decision, while our activities are
purely based on business," the association's chairman Faruk
Bakrie told The Jakarta Post.

He said that the association had no authority to ban its
members from halting their imports in retaliation of anti-
Indonesia sentiments in Australia.

Sahat M. Sinaga, director of the agro-based industry division
at the office of the State Minister of the Empowerment of State
Enterprises announced on Tuesday that local sugar mills had
decided to halt imports of raw sugar from Australia as a protest
against the neighboring country's "unfriendly manner" against
Indonesia.

He told journalists after a meeting with local sugar mills
that Australia's hostility was clearly shown when labor unions
rejected the handling of Indonesian goods at Australian ports.

Sahat's statement was confirmed by Asep Thoyib, executive
director of the joint marketing division of state plantation firm
PT Perkebunan Nusantara, saying that his company and some private
sugar firms had all agreed to stop sugar imports from Australia.

"We will only make deals with countries which respect
Indonesia," Asep said.

Australian unions boycotted goods leaving for and coming from
Indonesia in early September in an effort to pressure the
Indonesian government into restoring order in East Timor.

The unions lifted the boycott late last month, but threatened
to resume it if Indonesia restricted the multinational
peacekeeping force in East Timor.

Minister of Trade and Industry Rahardi Ramelan pledged last
week that the government would help local importers who wanted to
switch their imports of required raw materials from Australia to
find substitute supply sources.

Rahardi said it should not be difficult to find alternative
supply sources. He said Indonesia could easily import more raw
sugar from Thailand, Brazil, China and Pakistan.

Indonesia's import of raw sugar from these countries reached
640,000 tons during the period of January to October this year.

While the country's imports from Australia during the same
period alone reached about 320,000 tons, worth a total value of
US$56 million.

David Rutledge, chief executive of Australian sugar exporter
Queensland Sugar Corp (QSC), was quoted by Dow Jones on Wednesday
as saying that no sugar shipments to Indonesia had ever been
affected by the union work bans.

Rutledge said he needed to get clarification on the boycott
report as he was not aware of any raw sugar shipments from
Australia to Indonesia being halted.

QSC itself exported about 157,000 metric tons of raw sugar to
Indonesia in the last fiscal year which ended in June.

Meanwhile, the country's largest instant noodle maker PT
Indofood Sukses Makmur said it would divert wheat imports from
Australia to Canada, the United States and European countries in
fear of discontinuity of wheat supply following the Australian
dock union workers refusal to load Indofood's ordered wheat at
Australian ports early last month.

Indofood's director Franciscus Welirang claimed the shift was
not meant to boycott Australian wheat though he admitted that "if
the government decides to do so, we will follow."

Indofood's total wheat imports stood at 3.2 tons last year.
The figure is predicted to be about 3.1 tons this year. Indofood
currently obtains about 50 percent of its wheat supply from
Australia. (udi/cst)