Importers opposed to new sugar import rule

Importers opposed to new sugar import rule

JAKARTA (JP): The Indonesian Importers Association (GINSI) is
objecting to the new sugar import rule which grants Java-based
producers a monopoly on imports of the commodity.

"We will complain to the Ministry of Industry and Trade and
demand the importers' right to import sugar be restored," GINSI
chairman Amirudin Saud was quoted by Business Indonesia as saying
on Tuesday.

The Ministry of Industry and Trade last week ruled that sugar
imports could only be conducted by Java-based sugar producers for
the period from Aug. 5 to Dec. 31.

Amirudin warned the move would reopen opportunities for
corruption, collusion and nepotism that were rampant before the
government liberalized the sector last year.

He suspected that Minister of Industry and Trade Rahardi
Ramelan was pressured by others, including Minister of
Agriculture Soleh Solahuddin and sugar farmers, who he said had
little understanding of the sugar trade, to grant the right.

He attributed a doubling of sugar prices to Rp 4,000/kg to the
new policy.

Sugar producers are facing financial difficulties and would be
pressed to pay for imports to meet domestic demand in a bid to
compensate for the shortfall from local production, he added.

Annual sugar production of 1.7 million tons is far below the
domestic demand of 3.1 million tons.

The government is committed to liberalization of many of its
agricultural sectors, including sugar, beginning on Jan. 1, 2000,
under the rules of the World Trade Organization.

The latest sugar rule is aimed at protecting domestic
producers from imports. Producers, in turn, are obliged to buy
from local farmers before they can resort to purchasing imports.

Amirudin believed the previous policy, in which farmers were
subsidized by the government, was a better measure,

The government liberalized sugar imports last year as part of
its bailout agreement with the International Monetary Fund.
Imported sugar, which is cheaper than the local product, has
flooded the market since the move. (02)