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.