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local industry group has slammed state-owned logistics agency Bulog'€™s plan to import white sugar for buffer stock, claiming that local supply is sufficient to meet demand.

The Indonesian Sugar Association (AGI) executive director Tito Pranolo said on Monday that demand for white sugar could still be fulfilled from combined supplies of early-year stock carried over from last year and this year'€™s national
output.

Sugar stocks amounted to around 1.2 million tons as of December last year, a record high in more than one decade, according to the business group, while production will likely reach 2.6 million tons this year, similar to that of last year.

As of the end of March, the carry-over sugar stocks stood at 900,000 tons.

With estimated consumption of 2.7 million tons for the entire year, the country would have a surplus of around 1.1 million tons this year-end, Tito further said.

Therefore, it was now up to Bulog to absorb sugar from state-owned sugar mills owned by PT Perkebunan Nusantara (PTPN) and sugar cane growers.

'€œThe problem is not a shortage of sugar, but the price, which is based on auctions,'€ he told reporters in a press briefing, accusing the profit-seeking agency of wanting to buy domestic sugar only if the price was lower than that resulting from auctions.

The international sugar market is highly distorted due to common intervention by world nations, as the commodity is normally put under the highly sensitive category in many free trade agreements (FTAs).

Indonesia, the world'€™s fourth most-populous nation, consumes more sugar than its peers in Asia.

National sugar consumption hit 22.9 kilograms per person in 2012, compared to an average of 17.5 kilogram per capita in neighboring countries, according to the International Sugar Organization.

Once the world'€™s second-biggest sugar producer in the 1930s, Indonesia is now the third-largest sugar importer globally due to its failure to boost productivity of sugar cane plantations and revitalize its obsolete sugar mills.

The government previously appointed Bulog as a price stabilizer for key food commodities, including sugar.

Based on its calculation, there will be a deficit of 340,000 tons of white sugar for household consumption this year.

Bulog has so far secured 22,000 tons from domestic producers '€” state-owned agribusiness firm PT Rajawali Nusantara Indonesia and PTPN XI.

The Trade Ministry recently issued an import license (SPI) for Bulog to import 328,000 tons for its stockpiles from April 1 through May 15.

In response to AGI'€™s rejection, Bulog president director Sutarto Alimoeso said that his firm only complied with the government'€™s assignment to fill the gap in sugar needs through inbound shipment.

'€œThe decision to import is not based on import price, but on the government'€™s estimate that there will be shortage of sugar for consumption this year,'€ he said in a text message.

In a separate development, AGI proposed that the government soon issue a benchmark buying price to lure farmers to grow sugar cane this year.

The ideal level would be around Rp 8,500 (73 US cents) per kilogram, particularly to adjust with inflation and rising production costs, according to Tito.

Earlier, the multi-stakeholder body Indonesian Sugar Council (DGI) demanded the benchmark price be set at Rp 9,500 per kg. It was Rp 8,100 per kg last year.

Trade Minister Muhammad Lutfi said that the government would announce the benchmark price '€œsoon'€, but declined to specify the exact timeline. '€œI will talk to all stakeholders first to achieve a fair price.'€