RI and Thailand plan planes-for-sugar deal

BANDUNG, West Java (JP): Indonesia is seeking the second countertrade deal this year with Thailand, offering its locally- manufactured aircraft for Thai sugar.

"The government is trying to conclude that deal," said Coordinating Minister for Production and Distribution Hartarto after addressing the ruling party Golkar's scientific meeting here yesterday.

Hartarto, however, acknowledged that some problems remained before the plane-for-sugar deal could be finalized, because Thailand's sugar trade was conducted through the London Commodity Exchange.

"But we will do our best to make the deal," Hartarto added.

The government in April signed a US$34 million deal to swap two Indonesian-made CN-235 airplanes for 110,000 tons of Thai glutinous rice.

The Memorandum of Understanding for the countertrade deal was signed by Indonesian State Minister of Research and Technology B.J. Habibie and Thailand's Minister of Agriculture and Cooperatives, Suwit Khunkitti.

The two CN-235s are manufactured by IPTN, the state-owned aircraft industry in Bandung.

In a similar deal several years ago, Thailand purchased five Indonesian NC-212s, which have been used by the ASEAN country for seeding clouds.

Hartarto pointed out that Indonesia has to import a large volume of sugar this year. "Our sugar import this year could reach 400,000 tons, of which about 300,000 tons will be imported from Thailand," he said.

Last year, Indonesia also had to import 400,000 tons of sugar to meet the demand, which reached 2.6 million tons.

Due to bad weather, the country's sugar production last year dropped by 14 percent to 2.1 million tons.

Hartarto said that to increase sugar production, the government is currently making efforts to build sugar mills and plantations outside Java island.

The government decided earlier this year to gradually close down small and obsolete sugar mills in Java island for efficiency reasons. To prevent price escalations, new mills will be built outside Java. (17/13)