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.