Govt to reopen sugar import next year

Adianto P. Simamora, The Jakarta Post, Jakarta

The government plans to lift the ban on importing sugar from January next year to help ensure an adequate supply for the domestic market, a top official at the Ministry of Industry and Trade said on Tuesday.

Zaenal Arifin, the director general of basic chemical industries, agricultural and forestry products at the ministry, said that the supply of white sugar was expected to decline next year as there would be no sugar cane harvest from April to May.

"We predict imported sugar will start reentering the country at the end of January next year as there will be no sugar cane grinding here, which could cause a decline in the supply," Zaenal told Antara.

The government banned sugar imports in September to help protect local farmers from cheaper imports.

The grinding of sugar cane in the country normally occurs in April and May.

Zainal said that the ban on sugar imports would come back into effect if the country's output could keep up with local demand.

Indonesia is one of the world's top sugar importers, with 2.1 million tons of sugar entering the country in 1999, 1.2 million tons in 2000 and 1.6 million last year.

The country's total sugar output stands at 1.7 million tons with an annual consumption of about 3.3 million tons.

Sugar cane farmers have intensified pressure on the government to raise import tariffs to as high as 110 percent to stop sugar imports.

The government responded by increasing the import tariff on raw and white sugar to Rp 550 per kilogram and Rp 700 per kg respectively, while the import tariff on double-refined sugar was raised to Rp 700 per kg in July.

However, the farmers have said the policy was ineffective.

The Ministry of Industry and Trade issued a ruling which significantly limits the importation of sugar by allowing only certain state-owned plantations to import white sugar to help increase the price of the commodity on the domestic market.

Authorized importers can only import white sugar if the price increases to Rp 3,100 per kg at the farmers' level.

Elsewhere, Zainal said that the country's sugar distributors had also pledged to maintain the stock of 600,000 tons across the country.

Sugar cane plantations occupy 350,000 hectares in Indonesia, of which 60 percent of them are on Java.