Sugar factories closed due to cane shortage

Sugar factories closed due to cane shortage

BANDUNG (JP): Three of eight state-owned sugar factories in
West Java have been closed down due to a prolonged shortage of
sugarcane supply from farmers.

Mulyadi, head of plantation directorate of the provincial
Ministry of Agriculture and Plantation's office, said sugar
factories in Gempol, Jatiwangi and Kadipaten had to stop their
operations after suffering from big losses over the last nine
years.

In 1990 there were about 15,254 hectares of sugarcane
plantations in West Java, but the number dropped by 30 percent
last year, he said.

Demand for domestic sugar declined due to the fact that the
price of imported sugar is cheaper than the local product which
in turn led to lower sales and a drop in the area of sugar
plantations.

PT Rajawali Nusantara, a state-owned firm which manages sugar
factories in the province, is only able to maintain factories in
Karang Suwung, Sindang Laut, Tersana Baru, Subang and Jatitujuh,
said Mulyadi.

"PT Rajawali Nusantara suffers between Rp 4 billion and Rp 12
billion in losses per year due to scarcity of raw material,"
Muladi noted.

Meanwhile, a provincial councillor Yudi Widhiana Adi revealed
that the remaining five sugar factories in West Java are also
facing serious shortages of sugarcane supply, as most banks in
the province are still reluctant to provide cheap credit for
sugarcane farmers, an official said on Saturday.

Only state-run bank BNI and Bukopin have agreed to provide
loans with some Rp 25 billion and Rp 10.5 billion in low interest
credits from the respective banks said to be at hand.

Yudi said there is hope the situation may be improving for
sugarcane farmers in the future as sugar prices are getting
better.

"But banks are still reluctant to channel credit, although the
business is quite promising," said Yudi.(25)