Mega asks Rini to stop sugar imports

Adianto P. Simamora, The Jakarta Post, Jakarta

President Megawati Soekarnoputri said on Monday that she had instructed Minister of Trade and Industry Rini Soewandi to take action to stop sugar imports in a bid to protect local sugarcane farmers.

She was quoted by Antara as saying that the import of sugar into the country had become excessive.

"I once asked Ibu Rini to try and stop sugar imports, but there were complaints that we might suffer a shortage of the commodity," she said during the opening ceremony for a national convention on standardization.

She did not elaborate.

Today, the country's total sugar output is 1.7 million tons per year, compared with domestic consumption of about 3.3 million tons. To make up for the shortfall, the country imports sugar.

Indonesia is the world's second-largest sugar importer.

However, sugarcane farmers have long complained that imports were excessive, and that cheaper imported products were hurting their income.

They have staged demonstrations, calling on the government to impose a high import tariff on sugar to protect them from the massive inflow of cheaper, imported sugar products. The farmers have also demanded a subsidy.

After raising the import tariff on white sugar to Rp 700 per kilogram from the previous level of Rp 450 per kilogram, Rini issued a new decree stipulating that only state-owned plantation companies would be allowed to import sugar. Imports of the commodity will be stopped only if the price of sugar at the farmers' level falls to as low as Rp 3,100 per kilogram.

Farmers have said that the new import tariff is still too low and would not be effective in halting the massive inflow of cheaper imported products.

But Rini has argued that a very high import tariff would hurt local consumers and manufacturers that used sugar as a raw material in their production processes.