Govt to raise import duty on sugar again

YOGYAKARTA (JP): Minister of Agriculture Bungaran Saragih said here on Saturday that the government would further raise the import duty on sugar from the current 25 percent in order to protect local producers from cheap imports.

"We, along with the other ministries involved, are discussing the ideal increase that would be capable of protecting local producers," he told reporters on the sidelines of a seminar on Indonesia's sugar industry.

At the seminar held at the Garuda Natour Hotel, the minister said the planned rise would not be too high so that the move would not hurt consumers.

At least 2.2 million tons of imported sugar flooded the local market in 1999 as a result of the government's decision to lift the import tariff in 1998 as part of its reform commitment agreed with the International Monetary Fund (IMF).

The influx of cheap sugar led to a drastic drop in local sugar production to 1.50 million tons in 1999 compared to more than 2 million tons in 1998.

The national demand for sugar is 3 million tons per year.

The government imposed a 25 percent import duty late last year but local producers said that the new tariff was still too low.

Meanwhile, Adyarto Mochtar, the financial director of the Surabaya-based state plantation company PT PTPN XI, said that the current import tariff had helped to curb sugar imports.

"But it is still too low to restore sugar producers to their normal condition," he told The Jakarta Post.

He pointed out that at the current rupiah exchange rate of about Rp 9,250 against the U.S. dollar, imported sugar should be sold locally at above Rp 3,000 per kilogram. (44)