RI to cut import duties on sugar

RI to cut import duties on sugar

Aloysius Unditu and Arijit Ghosh, Bloomberg, Jakarta

Indonesia, the world's third-largest sugar importer, will cut the import tariff on the sweetener by as much as 54 percent to lower costs for poor Indonesians after kerosene prices were tripled.

The government will cut the import tariff on raw sugar to Rp 250 (2 U.S. cents) a kilogram from Rp 550 a kilogram from November, Coordinating Minister for the Economy Aburizal Bakrie told reporters at a midnight briefing in Jakarta. The government will also raise the procurement price of unhusked rice by 30 percent from January.

"It's aimed at helping Indonesian consumers and small and medium enterprises," he said.

President Susilo Bambang Yudhoyono, who is facing opposition from consumers in the world's fourth-most populous nation after promising a 29 percent price increase in March would be the last this year, is trying to ease the burden for poor Indonesians by cutting import tariffs on sugar before the Idul Fitri Muslim holidays in November.

Indonesia almost tripled kerosene prices from Saturday to cap energy subsidies. Susilo raised the price of fuel, which was being sold at less than half of the cost of imports, to reassure investors who last month sold the nation's currency and stocks as the subsidy bill surged.

Indonesia's sugar imports may surge 24 percent to a six-year high in the coming 12 months as local suppliers struggle to meet growing demand for the sweetener, a U.S. government agricultural report said in April.

Indonesia will probably buy the equivalent of 1.8 million metric tons of the commodity in the year ending April 30, 2006, the U.S. Foreign Agricultural Service in Jakarta said. That's up from 1.45 million tons a year earlier and the highest since 1999- 2000.