Indonesia to set out import plan to boost stocks
Published: 08/30/2010, 7:48:41 AM
Indonesia expects to see an increase in its annual imports of the commodity due to the negative impact of a prolonged rainy season on crops and decaying mills, according to the Jakarta Post.
Coordinating Economic Minister Hatta Rajasa said Friday the government would have to decide soon on the volume of imports needed as it would compete with other buyers amid global supply constraints.
"We are going to recalculate our white sugar stock at the end of this month before we come to a decision," Hatta said.
Sugar crop yields in the world's leading producing countries - with the exception of the EU, Russia and India - are now likely to be lower than expected at the beginning of the production season.
"There has been a decrease in local white sugar production because of continued rain," Hatta said. "This affects the quality of sugar concentrate and lowers how much sugar can be produced by sugar mills."
Coordinating Economic Minister's Deputy for Agriculture and Maritime Affairs Diah Maulida said the importation of white sugar for domestic household consumption would be decided next month.
"We actually have a surplus of white sugar to meet domestic consumption up to the end of the year. However, we should have sufficient stock for the period of scarcity before the harvest," she told The Jakarta Post.
She said domestic supply might be disrupted by low sugar production between January and May before the next sugarcane harvest.
The Coordinating Economic Minister's Office estimates the country's white sugar stock at 3,248,000 tonnes, 352,000 tonnes from last year's surplus, 446,000 tonnes from the rest of last year's imports, 2,300,000 from domestic production, and 150,000 from imports.
The domestic consumption of white sugar is 2.7 million tonnes per year.
Diah said imports should not be conducted one month before the sugar cane harvest in June and July, and two months after.
"We have to protect our farmers by guaranteeing that imports won't financially hurt them," she added.
Without weather disruptions, she said, domestic sugar production reached 2.8 million tonnes, or even 2.9 million tonnes.
Hatta said the government had a difficult task ahead, with current unpredictable weather resulting in tight competition among countries to strengthen their food stocks.
"We have to constantly be looking out for signals that some countries are boosting their food stocks. It could spark an increase in global food prices, so we have to do the same thing: maintain food stocks and supplies," he said.