Sugar production may drop 31 percent this year: Official

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)