Govt protects sugar farmers

JAKARTA (JP): All sugar mills in Java will be obliged to procure locally-produced sugar at Rp 2,500 (30 U.S. cents) a kilogram to protect farmers from the falling price of sugar on the local market, a senior minister has said.

Minister of Industry and Trade Rahardi Ramelan said here on Friday the government would pay the difference between the price of cheaper imported sugar and sugar grown in Indonesia.

"The policy will be effective only for the current harvest season," said Rahardi, who is also the chairman of the State Logistics Agency (Bulog).

Sugar farmers and the local sugar industry have been pushed to the brink of bankruptcy by a flood of cheap imported sugar which has hit the local market.

Lower international prices stemming from a sharp decline in demand and a stronger rupiah have made importing sugar more attractive than procuring it domestically.

According to one trader, the price of local sugar is currently between Rp 2,400 and Rp 2,500 per kilogram, Rp 1,800 higher than the price of the same quantity of imported sugar. (gis)