Govt revises self-sufficiency target for sugar to 2008

Govt revises self-sufficiency target for sugar to 2008

Zakki P. Hakim, The Jakarta Post, Jakarta

With annual household consumption reaching 2.5 million tons of
sugar, Indonesia needs to revise its self-sufficiency target from
2007 to 2008 as the country's sugar output this year is projected
to reach a maximum of 2.2 million tons.

Minister of Agriculture Anton Apriyantono said on Monday that
the projected output would not be enough to meet the domestic
total demand of 3.3 million tons, including some 800,000 tons for
industrial refinery needs.

The projected demand figure came from the Indonesian Sugar
Council (DGI), which said that industrial refinery needs are
traditionally fulfilled through imports.

"We need an additional output of at least one million tons.
Looking at the current trend, we cannot achieve the original
target of household sugar self-sufficiency in 2007," Anton said
on the sidelines of a joint hearing with several House of
Representatives commissions.

To produce the additional one million tons of sugar as much
new farmland as 120,000 hectares would be required, the locations
of which, he said, would be spread across the country, including
in Merauke, Papua.

The ministry expects the plantation sector as a whole to grow
from an estimated 6.01 percent this year to 6.49 percent in 2009,
it said in its five-year plan document made available to The
Jakarta Post.

Based on past trends, the ministry has targeted sugar output
to reach 2.85 million tons in 2009, up by an average 7.09 percent
annually from this year's official estimation of 2.16 million
tons.

Assuming that the annual household sugar consumption remains
at around 2.5 million tons, the country would enjoy a surplus in
2008, when output is predicted to reach 2.66 million tons.

During the presentation at Monday's hearing, the government
said it had calculated that the agriculture sector would need an
annual working capital of Rp 3.7 trillion (US$389.47 million) by
2007 to support three main activities in boosting output.

The activities are rehabilitating or replanting sugarcane
plantations, upgrading sugar factories and increasing investment
to develop sugarcane derivatives products and new processing
plants outside Java.

In the meantime, the government will keep regulating sugar
imports, the system and procedure of which will be evaluated in
the near future.

Anton said the government was considering the involvement of
more listed importers in meeting the domestic demand, through a
bidding system and dispersing importers based on target
provinces.

Minister of Trade Mari E. Pangestu confirmed that the
government would review the sugar import limitations. She said
she would review the need for the implementation of such a system
after the country reached sugar self-sufficiency.