Yayat Supriatna – Indonesia is concerned about domestic white sugar supplies between March and May next year when current stocks of 740,000 tons run out and the new crushing season has yet to start, a senior trade ministry official said on Wednesday.
Bayu Krisnamurthi, deputy trade minister said this at a meeting with the Indonesia Sugarcane Farmers Association (APTRI), who was demanding the cancellation of a plan to import 500,000 tons of sugar next year and other policies they say have made them lose several hundred million dollars.
"Currently there is 740,000 tons of white sugar in local warehouses," Krisnamurthi said.
"With monthly white sugar consumption of 220,000 tons, the stock may last for 3.5 months. What we (are) concerned (about) is the availability of white sugar in March, April and May next year when the stocks are finished and there is no sugarcane milling activity at the time," he added.
Indonesia's 2011 white sugar output is estimated at 2.35 million tons, Krisnamurthi said, reiterating the government forecast from last month. This year's total lags the government target set earlier this year at 2.7 million tons, which means it will be more difficult to reach its self-sufficiency aim in 2014.
Indonesia, Southeast Asia's top sugar consumer, imports more than 2 million tons of sugar a year, both raws and whites, to meet household and industrial consumption. The country imports 60 percent of its sugar from Thailand, 20 percent from Brazil, 10 percent from Australia and is seeking to boost purchases from India, officials have said.
"We, APTRI come to Jakarta from West Java, Central Java, East Java, Yogyakarta, North Sumatra and Lampung with 5,000 farmers to insist that the government stop its sugar import plan of 500,000 tons in 2012," Soemitro Samadikoen, chairman of APTRI earlier told demonstrators at the trade ministry.
"We still have much white sugar stocks in our warehouses in East Java and in other key sugarcane-growing areas all over Indonesia. So, we do not need to import sugar," he added.
2012 imports not yet decided
But Krisnamurthi said the government has not yet decided on its 2012 sugar imports and will calculate its demand by taking into account the shortfall in production this year.
Samadikoen said APTRI also wants the trade ministry to stop distribution of refined sugar for industrial use, which has in effect been penetrating the household market and forced down prices and wants the government to pay more attention to farmers to make local white sugar more competitive.
"Sugarcane farmers have lost 2.4 trillion rupiahs ($264.61 million) in 2011 because of imported sugar, illegal sugar and the penetration of refined sugar for industrial use to household market," he added.
The losses mainly came from the declining prices of sugar farmers earned to 8,300 rupiahs per kg this year from 9,300 rupiahs in 2010, Samadikoen said.
APTRI's Secretary General Fatchuddin Rosyidi said there is a lot of illegal sugar in the domestic market that entered Indonesia via border areas in West/East Kalimantan and Riau. Refined sugar for industrial use is also commercially traded widely in Sulawesi, Kalimantan, Bali, Nusa Tenggara and eastern Indonesia, Rosyidi added.
Krisnamurthi said Indonesia needs 2.5 million tons of refined sugar for industrial use annually. Indonesia was the world's second-largest sugar exporter after Cuba in the 1930s, but ageing sugar mills, a vast network of smallholders and an influx of cheaper imported sugar put pressure on local production.