Rini rejects higher duty on sugar
Rini rejects higher duty on sugar
Adianto P. Simamora, The Jakarta Post, Jakarta
Minister of Industry and Trade Rini M. Soewandi rejected calls to
raise import tariffs on sugar by up to 110 percent as demanded by
sugarcane farmers, saying such high tariffs would jack up sugar
prices at home.
She said on Thursday that Indonesia was still dependent on
imported sugar to meet high local demand.
"We must remember that local production is not enough to meet
local demand," Rini told reporters.
Dozens of sugarcane growers from the Sugarcane Farmers'
Association (APTR) staged a rally earlier on Wednesday in
Jakarta, demanding that the government raise import tariffs to
curb the increasing influx of cheaper imported sugar from
Thailand, Brazil and South Africa, which they said had been the
primary cause for the declining price of the commodity here.
The association also repeated calls to terminate the special
low import tariff applied to sugar imported by certain export-
oriented industries supposedly as raw material for their
production processes, but which had instead been redirected to
the home market.
Indonesia, the largest sugar importer in the region, currently
applies a 20 percent import tariff on refined sugar and a 25
percent tariff on raw sugar.
Indonesia produces approximately 1.5 million tons of sugar
annually, while domestic consumption stands at around 3 million
tons per year.
The country imported around 2.1 million tons of sugar in 1999
and 1.2 million tons in 2000.
The price of raw sugar on the domestic market has fallen to
around Rp 2,700 (about 27 U.S. cents) per kilogram lately from Rp
3,625 in January. The farmers say the fall is mainly due to the
influx of imported sugar selling at between Rp 2,500 and Rp 2,650
per kilogram.
Rini, however, said that the new policy requiring sugar
importers to have a special identification number issued by her
ministry was expected to be able to help limit sugar imports.
Sugar is one of the eight commodities whose importation may
only be undertaken by importers who have obtained special
identification numbers.
Other commodities affected by the new policy include textiles,
electronic goods, footwear, rice, corn, soybeans and toys.
The new policy is also aimed at helping curb rampant smuggling
of these commodities into the country via underinvoicing
practices, which have caused the government to suffer huge tax
losses.
The value of these imported commodities totaled $2.79 billion
last year, or 10.9 percent of total non-oil and gas imports.
Smuggling has become rampant over the past five years since
the country plunged into a deep economic crisis in 1997.