Government vows to curb smuggling of cheap sugar
Government vows to curb smuggling of cheap sugar
Dadan Wijaksana, The Jakarta Post, Jakarta
The Customs and Excise Office and the Ministry of Industry and
Trade are currently designing a detailed burden-sharing mechanism
to supervise inter-island trade in sugar and other commodities
within the country in a bid to curb rampant smuggling.
Director General of Customs and Excise Eddy Abdurrachman said
the scheme would form the operational guidelines for a decree
issued by the Ministry of Industry and Trade that regulates the
shipment of agricultural commodities within the country.
The decree in question is No. 61/2004, and was signed by Rini
two months ago, but will not be effective until after April 17.
"The shipment (of commodities) within the country is not
forbidden. But as sugar is among those commodities that have
their own regulations, including on importation, its shipment
must be watched closely. The detailed scheme is currently being
discussed," Eddy said on Wednesday.
The ministry issued last September a ruling limiting the
importation of sugar. Only manufacturing firms that take 75
percent of their sugar as raw material from local farmers are
allowed to import raw, refined and white sugar. The move is
expected to help increase the price of sugar in the local market
and improve farmers' incomes.
The firms that are allowed to import sugar include state
plantations PT Perkebunan Nusantara IX, X, XI and RNI. They are
tasked to fill the huge gap between domestic supply and
consumption.
In 2002, for instance, Indonesia produced only 1.8 million
tons of sugar, while demand reached 3.2 million tons.
Still, the move has failed to stop the smuggling of cheaper
sugar from overseas into the country, which has flooded the local
market and hurt sugarcane farmers.
Indonesian Association of Sugarcane Growers (APTRI) chairman
Arum Sabil said earlier that smuggled sugar hurt domestic sugar
growers. "The smuggled sugar badly hurts our sugarcane growers,
for it is sold for as little as Rp 1,200 per kilogram because no
import duties and taxes are paid on the commodity," he said.
He added that most of the illegal sugar came from Malaysia,
India and Thailand, where sugar production cost could be as low
as half the production cost to Indonesian sugar makers due to
subsidies provided by the governments of those countries.
In contrast, it costs sugar producers here at least Rp 3,410
to produce a kilogram of sugar.
The latest example of rampant sugar smuggling here occurred
a few days ago, when the customs office at Tanjung Priok port
detected and held 197 containers with an estimated weight of
3,758 tons. The sugar was being smuggled from Malaysia to Jakarta
via Medan.
Rini has reportedly suggested the illegal sugar be destroyed
so as not to put the price of local sugar under further pressure
-- a move supported by Minister of Agricultural Bungaran Saragih.
When this was confirmed to Eddy, he said all would be resolved
soon, as a consultation meeting between related institutions had
been arranged.
The customs office is administratively a unit under the
Ministry of Finance.