Sugar production may drop 31 percent this year: Official

JAKARTA (JP): Indonesia's sugar production is expected to drop by 31 percent to 1.5 million tons this year, from 2.1 million tons last year, an official at the ministry of forestry and plantations said on Monday.

Director of the Development of Plantation Production A. Simandjuntak attributed the decline to the prolonged drought, heavy rains and the scarcity of fertilizers.

"As of October, Indonesia's sugar production had only reached 1.2 million tons, so we expect that the production in the whole of 1998 will only reach 1.5 million tons, a drop of 31 percent compared to last year's 2.1 million tons," he told reporters.

"It is the lowest in the past three years."

Simandjuntak was quoted by Antara news agency as saying that the prolonged drought this year has delayed the cane planting season and has further delayed harvest time.

"Because of the delay in planting, the harvest fell in a season of heavy rains. This caused lower output than was expected because the content ratio was lower," he said.

He also blamed the scarcity of fertilizers among sugarcane farmers and the delay in the distribution of farming and cooperatives loans for the decline.

Simandjuntak said that the government has imported 1.3 million tons of sugar this year, mostly in the form of raw sugar, to meet the domestic demand.

He said that the government planned to boost the country's sugar production to 2.4 million tons next year and to 2.6 million tons in year 2000.

"It can be done by increasing the sugarcane plantation area up to 423,000 hectares nationwide with a content ratio of 7.6 percent," he said.

The domestic demand for sugar is about 3 million tons but the country only produced about 2.1 million tons of sugar last year, a 2.2 percent drop from 1996.

Imported sugar last year cost the country about US$350 million in foreign exchange, he said.

Simandjuntak said the growth in local sugar production was much lower than the yearly 3.8 percent rise in consumption.

"The production decline is mostly caused by the decrease in the number of sugar plantations and their size. Many farmers have converted their sugarcane plantations into other crops or horticulture plantations because these are more profitable," he said.

He added that the increase in productive sucarcane plantation areas has to be followed with the improvement in the quality of the estates.

Simandjuntak said the lack of productive land in Java, the largest sugarcane producing area in the country, was another hurdle for growth in sugar production in addition to the poor condition of existing mills.

He said increased production could only come from plantations outside Java where more space was available.

He said that about 63 percent of domestic sugar production came from state-owned sugar mills on the densely populated island of Java this year, while the remain 37 percent came from outside Java.

Simandjuntak said that the government is now facing a dilemma in boosting the country's sugar production.

"To be self-sufficient in sugar, we have to protect our sugarcane farmers and to limit sugar imports. But it will be against the regulations set by WTO (World Trade Organization)," he said.

He said the government's existing sugarcane farming policy had yet to encourage sugarcane farming, although trading has already been liberalized because the price of imported sugar in the domestic market was lower than the price of local produce. (gis)