Govt to raise import duty on sugar again

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)