Jumat, 24 Juli 2015

WILL SELF-SUFFICIENCY IN SUGAR PRODUCTION REMAIN A DREAM?

 By Andi Abdussalam
          Jakarta, July 24 (Antara) -- Once again, the Trade Ministry has issued a license to import 640,430 tons of raw sugar, to meet the need for the commodity in the third quarter of the year.
        "The ministry has already issued a license to import some 600 thousand tons of sugar," Trade Minister Rachmat Gobel said on Thursday.
        The annual importation of sugar seems to reflect Indonesia's inability to meet its ambition to become self-sufficient in sugar production.
        As an agrarian country with vast land for agriculture, Indonesia should be able to become a major global exporter of agricultural products. Yet, the country has been adversely importing agricultural products such as rice, fruits, soybean, sugar and others.
        Besides that of rice, the import of sugar hurts local farmers nearly every year. These two agricultural commodities have always sparked controversy, sometimes used as a 'weapon' to criticize political adversaries.
        However, the inability of the country to meet its need for sugar has forced the government to import about half its annual need for more than 5 million tons per annum.
        The country's white sugar production capacity is 2.7 million tons per year, as compared to consumption need of 4.8 to 5 million tons a year. The remaining 2.3 million tons is imported.   


   However, the imported sugar should be designed for the food and beverage industries.

        Agriculture Minister Andi Amran Sulaiman stated recently that Indonesia has to import refined sugar for industries.
        "What we plan to import is not white sugar but double-refined sugar for industries," he clarified.
         The Trade Ministry has issued a license to import 640,430 tons of raw sugar to meet demand in the third quarter of the year, to feed domestic double-refined sugar industries.
         The government has allowed the importation of sugar only to meet the need of food and beverage industries. This has been done to ensure that sugarcane farmers are not affected. However, imported sugar often ends up in consumer markets, which sparks protests.
         According to Minister Gobel, the decision to allow the import was made after the condition of supply of double-refined sugar to the country's food and beverage industries was evaluated.
         Imports are needed to guarantee supply of raw sugar to double-refined sugar industries, the minister explained, adding that they are also required to prevent illegal imports of the commodity.
         "Illegal imports hurt domestic industries, especially in border areas," he pointed out.
         In the second quarter of 2015, a license was issued for the import of 945,642 tons of sugar, but only 587,028 tons of the commodity was imported.
         The Trade Ministry had issued a license to import 672 thousand tons of raw sugar in the first quarter, 945,643 tons in the second quarter, and 640,430 tons in the third quarter.
         Indonesia depends on the import of raw sugar to feed its refined sugar industries, to produce sugar for food and beverage industries.
         This year, the country's total requirement of household sugar has been estimated to amount to 2.8 million tons, which can be met by domestic production. However, the need for sugar to feed industries must be met with imports.
         In Indonesia, there are some 60 sugar factories that are expected to meet domestic demand without imports.
         In fact, the previous government under former president Susilo Bambang Yudhoyono had set a target to make the country self-sufficient in sugar. It had planned to be able to produce 5.7 million tons of sugar by 2014.
         However, Yudhoyono's government failed to realize its target for sugar self-sufficiency. It had set the target even though the country's sugar production had never exceeded 2.7 million tons in the last decade.
         To achieve its sugar production target of 5.7 million tons by 2014, the government should have expanded its sugarcane plantations to spread over approximately 850 thousand hectares of land from the 450 thousand hectares then.
         According to Ismed Hasan Putro, the then president director of PT Rajawali Nusantara Indonesia (RNI), an agro-based company that has at least 10 sugar mills in Java, the government needs another 400 thousand hectares of land to cultivate sugarcane if it wants to achieve the target it set for 2014.
         Putro's successor as the president director of PT RNI, Didik Prasetyo, said recently (July 10) that his company had set a target to harvest 100 tons of sugarcane in 2016-2017, higher than this year's target of 70 tons per hectare.
        In addition, Director General of Internal Trade of the Ministry of Trade Srie Agustina said that there was shortage of stock especially during holidays such as Ramadan.
       During this period, imported sugar is often found leaked to the consumer market, as the price during such periods is often higher.
        Therefore, during the fasting month of Ramadan, the Trade Ministry ordered sugar producers to maintain prices at a normal level of Rp11,000 per kilogram.
        "We have written to sugar producers, instructing them to maintain the price of sugar at Rp11,000 per kilogram at the consumer level and at Rp10,800 per kilogram in market operations. This is needed to maintain stability in prices of essential commodities," Director General of Internal Trade of the Ministry of Trade Srie Agustina said a week (July 8) before Eid or Lebaran.
        The director general also pointed out that the instruction was issued based on presidential regulation number 71/2015 on the price and stocks of essential products.
       "Sugar producers are expected to hold complete responsibility for the distribution of the commodity and to maintain the price in their distribution networks," Agustina emphasized.
        Moreover, she explained that the aim of the policy was to ensure that the price of sugar is maintained at a reasonable rate of Rp11,000 per kilogram.
       "This instruction is to ensure that they uphold their responsibility of guarding it," she remarked.    ***3***(T.A014/INE)EDITED BY INE(H-YH)(T.A014/B/BESSR/A/Yosep) 24-07-2015 23:30:0

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