By Andi Abdussalam
Jakarta, Aug 24 (ANTARA) - Sugar producers in Indonesia are complaining about refined sugar available on local markets, as the commodity is normally imported for special consumption by industries.
"The entry into the country's retail market of refined sugar would discourage domestic sugar cane growers in increasing the volume of their production," Gatot Kussetiady, administrator of Central Java's Sragi sugar mill, said on Friday.
The government has allowed the importation of refined sugar in an effort to meet the need of raw sugar for industries but sugar producers at home said the imported sugar had also entered retail markets.
As sugar cane growers are discouraged, pessimism also arises about the country's ability to meet its self-sufficiency production target at 3.6 million tons this year.
"I think Indonesia is unable to meet its self-sufficiency target because the country's sugar mills' production is estimated at only 3.1 million a year," Kussetiady said.
On the other hand, failure to meet the production target would give a chance to more sugar imports.
According to the Indonesian Sugar Experts Association (Ikagi), the government has a plan to import 1.8 million tons of sugar and 600,000 tons of refined sugar in 2008. Indonesia's sugar production stood at 2.1 million tons last year, well below its sugar consumption estimated at 3 million tons.
"The price of local sugar will undoubtedly come under pressures if the plan to import raw and refined sugar is implemented," Ikagi Deputy Secretary General Adig Suwandi said recently.
That's why, Kussetiyadi expressed hope that the government would change its sugar trade regulation so that sugar price would also increase.
"The sugar trade regulation in force now does not benefit sugar growers because sugar price could not be increased. We hope the government would change the regulation so that it would be similar to that on rice which allows the price to increase every year," he said.
According to H Slamet, chairman of the Indonesian Sugar Cane Farmers (APTRI), Pekalongan branch, the sugar price at factory level was only Rp5,000 per kg, which was not competitive with the costs the farmers would spent.
"Ideally, the government should have fixed the price at Rp6,000 per kg," he added.
Besides price increase, sugar producers also hoped that refined sugar imports should not spill over into retail markets.
Virtually, the Trade Ministry has issued Trade Minister's Letter No.357 / M-DAG/4/2008 dated April 2, 2008 on Distribution of Refined Sugar in the Regions which forbids refined sugar distributors to sell their sugar to retailers.
Despite the trade minister's regulation, sugar producers at home claimed that refined sugar imports were sold to retail market.
In response to the sugar producers' complaint, Minister of Agriculture Anton Apriyantono asked the Ministry of Trade to withdraw refined sugar from the market to protect sugarcane growers in the country.
He said that refined sugar, used in the food and beverage industry may not be sold to retail markets for consumption.
The agriculture minister, who is also chairman of the Indonesian Sugar Council (DGI) said he was ready to prepare a policy on the matter, for the settlement of the problem of refined sugar sold on the market.
Earlier, the Association of Sugar Experts said that up till now refined sugar for the food and beverages industry is still available in the market as consumption sugar, and therefore disrupted the availability of local sugar.
Adig Suwandi said that refined sugar is widely available in suparmarkets and traditional markets offered in one or two kilograms packing.
"It is not clear where the refined sugar came from, but the commodity is both locally produced and imported," he said.
As a result of the rampant circulation of refined sugar, the market absorption of local sugar has been declining, he said.
Therefore members of the Ikagi have urged the government to immediately withdraw refined sugar from the free market, and audit the origins of the commodity.
Against Kussetiyadi's pessimistic estimate, Suwandi adversely saw an upward trend in the country's sugar production.
He said that Indonesia's sugar production in the 2008 milling season was estimated at 2.72 million tons, which is higher than the production during the milling season in 2007.
"The production estimate is based on the acreage of sugar cane plantations which reach 445,113 hectares and milled sugar cane 34.26 million tons," Suwandi said.
"If that estimate comes true, Indonesia whose sugar consumption reaches 2.7 million tons, will be self-sufficient in the commodity, particularly sugar for direct consumption," he said.
A national workshop on the 2008 milling season's mid-term evaluation organized by the Indonesian Sugar Association (AGI) in Yogyakarta on August 11-12, 2008 revealed that the production of the 58 sugar mills up to July 31, 2008 was recorded at 1.23 million tons.
Of the total, 673,441 tons were produced by 46 sugar mills in Java and 559,468 tons by 12 sugar factories outside the island.
The average production of the 58 sugar mills stood at 6.27 tons of crystal sugar per hectare with a sucrose content of 8.02 percent.
As a comparison, the milling production in the same period in 2007 was lower than that in 2008, reaching only 959,913 tons.
Suwandi said that overall there had been an increase in the sugar production of almost all sugar factories in Indonesia.
"There is an interesting phenomenon in this year's milling season such as the increase in sugar cane weight and productivity experienced by among others state-owned plantation companies (PTPN) II, X,XI,XIV, PT PG Tjandi, and PT Madu Baru," he said.
He said that although sugar production had been increasing, sugar milling and other sugar businesses were also worried about the declining prices. (T.A014/A/HNG/B003) 24-08-2008 22:40:11
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