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)