Sugar's producer price rises by 5.5 percent

JAKARTA (JP): The government has raised the producer selling price of sugar 5.5 percent to Rp 96,080 a quintal or Rp 960 a kilogram to support sugar-cane growersbut assured the consumers that the retail price would remain stable at the current level.

The minister of finance, Mar'ie Muhammad signed the decree on the price raise yesterday and it was effective immediately.

The minister of agriculture, Sjarifudin Baharsjah, said yesterday it was the first price rise since 1995 when the government raised the selling price to Rp 91,080.

"The producer price of sugar has not increased since then, although the price of unhusked rice and seeds have increased, and workers' wages are higher now," Sjarifudin said.

The government also raised the farmers' take under their production-sharing agreement with sugar mills from 62 percent to 65 percent which will increase their income an average of 11.23 percent.

Of the 65 percent, 10 percent would be in the form of sugar, up from 6 percent previously, he said.

He said the rise in the producer price would increase the farmers' share of the retail price from 61 percent in 1995 to 65 percent.

"The revenue of sugar plantations on Java will only drop by about 1 percent, given that all other costs have not risen," he said.

Despite the price increase, the government aimed to maintain sugar retail prices at about Rp 1,500 a kilogram, Sjarifudin said

"Retail prices will remain the same because producing costs will not rise, and because the logistics agency still imports the commodity," he said.

Indonesia produces 2.3 million tons a year of which Java contributes 69 percent. (das)