Arientha Primanita & Faisal Maliki Baskoro – In an attempt to keep price-depressing imported sugar from flooding the local market, the government plans to use a single office to monitor shipments of the commodity and distribute it to private companies.

"We want the imported sugar – whether it's refined, white or raw – to be handled through one door," State Enterprises Minister Mustafa Abubakar said on Sunday. "We will carry out a meeting with the House of Representatives to discuss sugar imports."

Mustafa said a one-door policy was needed to control distribution. The trade ministry will appoint state logistics agency Bulog as the sole importer.

Without strict regulation, there are fears the goods will flood the retail market, pushing prices down. There are claims farmers would also suffer losses because they would have to compete on price with imported raw sugar sold to local refiners. Currently eight companies hold importing licenses, and the price of sugar is unregulated.

Sutarto Alimoeso, president director of Bulog said his organization was prepared to handle the task. This year, the government allowed the importation of up to 2.4 million tons of sugar. Industrial demand for refined sugar is estimated to be 2.2 million to 2.3 million tons this year.

"Bulog's function is to control crop prices and supply," Sutarto said. "Sugar is a strategic commodity and with this policy we will be able to stabilize price and control distribution."

Natsir Mansyur, chairman of the Indonesian Association of Flour and Sugar Traders (Apegti), was pessimistic about the government's plans. "The industry can absorb only up to 75 percent of the quota, while the rest will leak into the retail market," Natsir said. "The retail market will absorb it because it is cheap,".

The government has previously tried several methods to control distribution of refined sugar, including boosting domestic sugar production and establishing a task force to monitor refined sugar distribution.

The Indonesian Sugar Council (DGI) forecast the nation's sugar production this year to increase by 17 percent to 2.7 million tons on the back of plantation expansion and improving weather conditions. Meanwhile, overall demand for raw and refined sugar is expected to hit 4.6 million tons this year.

Industry ministry representative Benny Wahyudi cast doubt on the country's ability to meet its goal of self-sufficiency in the next three years so that imports will not be required.

"Self sufficiency can be achieved if we can produce 5.7 million tons of sugar annually, with an additional 350,000 hectares of land," Benny said, adding that was more than double the 2.1 million tons that the government forecasts for 2014.