Bulog gets license to import extra amount of sugar

Adianto P. Simamora, The Jakarta Post, Jakarta

The government has awarded the State Logistics Agency (Bulog) a license to import an extra 150,000 tons of sugar this year, in a bid to stabilize the price of the commodity on the local market.

Mahendra Siregar, a senior adviser at the Office of the Coordinating Minister for the Economy, said on Thursday that some 100,000 tons of Bulog-imported sugar were expected to arrive here next week to help meet the country's sugar demand.

He was speaking after economics ministers had met to discuss ways of resolving the problem of rising sugar prices.

They have increased from the government-set price of Rp 4,000 (45 US cents) per kilogram (kg) earlier this month, to around Rp 6,000 now.

The government, however, claimed that the price of sugar had now stabilized to an average of Rp 4,698 per kg.

Meanwhile, Minister of Agriculture Bungaran Saragih warned that there should be no sugar imports entering the country after May 5, to help avoid an oversupply of the commodity at home, as the May and June harvest period was approaching.

"It would be good if the imported sugar could arrive here before May 5, but I'm worried the price of sugar for farmers will fall if imports are still entering the country after mid-May," said Bungaran.

The sugar harvest normally starts in May, as the country's sugarcane processing plants work from May through July.

Bungaran predicted that some 68,000 tons of local sugar would arrive at the market in May.

"In June, we shall have produced some 150,000 tons of sugar; enough to meet our (domestic) consumption," he said.

It is still not clear why sugar prices at home could have jumped to a record high of Rp 6,000 per kg. Some said that this was due to Minister of Industry and Trade Rini M. Soewandi's policy last year that reduced the number of sugar importers to only four state-owned plantation companies, from previously around 800 importers. The policy was aimed at preventing an oversupply at home and protecting the interest of local sugarcane farmers. Under the policy, Bulog, which was also allowed to import some 100,000 tons this year, would distribute the sugar imported by the plantation firms.

But others suspected that the price hike was mainly due to hoarding by Bulog and its appointed distributors, in a bid to prop up the price of the commodity and reap greater profits.

According to a media statement issued by the Office of the Coordinating Minister for the Economy, some 47,171 tons of sugar were held in Bulog warehouses, as of April 22.

Elsewhere, Bungaran was optimistic that the country's sugar output would increase to about 2 million tons this year, from 1.75 million tons in 2002.

He said that the rise in production was due to an increase in sugarcane productivity.

The country's sugar consumption rate is about 3.3. million tons per year. Indonesia imported some 1.6 million tons last year.