Indonesia seeks to import 400,000 tons of sugar

The government has officially approved a plan to import 400,000 tons of white sugar to fulfill next year’s domestic demand while waiting for the milling season which will fall in May, a minister said Monday.

“We have calculated demand based on the government’s latest figures. We will import at least 400,000 tons,” Agriculture Minister Suswono as quoted by detikfinance.com news portal.

The minister said the government had approved the import plan, but that he did not know the precise date when the permit would be issued because this was the authority of the Trade Ministry.

Trade Minister Mari Elka Pangestu said earlier the ministry would issue the permit for the sugar import this week or before the Idul Fitri holiday on Friday.

The ministry said the import would be ordered in anticipation of a supply shortage in the first five months of 2011. The delivery is expected to begin in December or January.

According to the Indonesian Sugar and Flour Traders Association (Apegti), domestic sugar stocks to the end of this year amount to 800,000 tons.

Indonesia uses around 200,000 tons of sugar a month, hence to meet domestic demand from January to May next year the government would need to import.

Apegti chairman Natsir Mansyur said the government should sign the sugar purchase contract as soon as possible considering that the price of sugar was relatively low —around US$550 per ton.

“If the government buys [in November or December], the price will have soared to around $750 per ton,” Natsir told The Jakarta Post.

The government should also buy as soon as possible to keep the selling price low, he said.

If the government buys at a higher price, the public will bear the brunt of the difference, he said.

“The government should learn from the experience with last year’s import,” Natsir said.

Last year, the government bought sugar at an inflated price, increasing the price of sugar in the local market. I hope the government won’t make the same mistake again,” Natsir said.

According to the association, in early 2010, Indonesia imported 500,000 tons of sugar to fulfill domestic demand in the first five months of this year.

In 2009, the import was only 250,000 tons.

The government has run several programs to decrease next year’s sugar import.

Efforts have included the revitalization of factories and other means to boost yield, but the trade minister said bad weather had hampered farmers’ productivity.

According to Apegti, this year’s national sugar production may drop to 2.4 million tons from 2.7 million tons in 2009, because of bad weather conditions, meanwhile domestic demand for sugar will reach more than 2.3 million tons a year. (rdf)