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Indonesia to Only Import Raw Sugar in Future: Trade Minister
February 23, 2012

A worker sits between stacks of sugar cane at the Tasik Madu sugar mill in Solo, Indonesia A worker sits between stacks of sugar cane at the Tasik Madu sugar mill in Solo, Indonesia's Central Java province in this file photo. Indonesia will only issue import permits for raw sugar and not white sugar in the future, as it seeks to refine more sugar as part of a drive to boost manufacturing. (Reuters Photo/Beawiharta)
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Indonesia, Southeast Asia’s largest sugar consumer, will only issue import permits for raw sugar and not white sugar in the future, as it seeks to refine more sugar as part of a drive to boost manufacturing, the trade minister said on Thursday.

“For the coming years, we plan to issue raw sugar import permits only, not white sugar or other kind of sugar,” Trade Minister Gita Wirjawan told Reuters.

“This is aimed at adding value locally.”

Wirjawan said there was still a shortage of white sugar in the domestic market, and that permits for raw sugar imports would be issued shortly.

“We are now considering a raw sugar import proposal from the Indonesian Sugar Board (DGI) and Agriculture Ministry,” he added. “We will issue the permit soon.”

White sugar stocks were estimated at 598,932 tonnes between February and May, lower than consumption of 860,000 tonnes.

Last month, the agriculture minister said Indonesia had ample white sugar stocks to see it through until milling season, which usually begins in May. 

This month, the minister said Indonesia planned to import 240,000 tonnes of raw sugar in 2012 to make up for a white sugar shortage. 

The archipelago imports sugar because domestic production cannot catch up with demand, each year buying about 2 million tonnes of raw sugar, or half of its consumption, mostly from Thailand.

Indonesia imported 118,129 tonnes of white sugar last year, from total permits for 450,000 tonnes. The government is only allowed the issue of white sugar import permits from January until April.

Imports of monosodium glutamate (MSG), raw, refined and white sugar into Indonesia were an estimated 3.3 million tonnes in 2011, the Indonesian Sugar Association (AGI) said last year. 

Thailand provides 60 percent of Indonesia’s imports, with 20 percent from Brazil and 10 percent from Australia, the AGI says. Southeast Asia’s largest economy has already stated that it would not import any white sugar this year because it had enough stocks to see it through until its milling season.

Indonesia’s 2011 white sugar output is estimated at 2.35 million tonnes, with monthly white sugar consumption at about 220,000 tonnes, government officials say.

The world’s largest Muslim population was the world’s second-largest exporter of sugar in the 1930s, but ageing mills, a vast network of smallholders and an influx of cheaper imported sugar put pressure on domestic production. Sugarcane farmers protested in December against plans to import sugar this year.            

Reuters