RI's sugar production likely to miss target

Amid legislators` calls on the government to continue monitoring progress of its sugar self-sufficiency roadmap, the Indonesian Sugar Council (DGI) is revising downward its sugar production target this year from 2.7 million to 2.57 million tons.

It seems that the country is unable to meet the target because of weather anomalies that affected various sugar cane plantations. Thus, the country`s crystal white sugar production is expected to reach only 2.57 million tons lower than the earlier projection of 2.7 million tons.

"The production is estimated to be lower than the earlier target because of the effect of last year`s weather anomalies is still felt this year," Head of DGI Secretariat Bambang Priyono said here on Thursday.

Although crystal white sugar production this year is lower than the initial prediction, yet production in 2011 will still be better than that of last year, when crystal white sugar production totaled 2.36 million tons only.

While this year`s production estimate is only 2.57 million tons, the government has set the target of national sugar production at 5-5.5 million tons per year to reach self-sufficiency in 2014.

To achieve the target, according to Vice Agriculture Minister Bayu Krisnamurti, the government has adopted a number of policies, including allocating Rp9 trillion in funds for the revitalization of sugar mills across the country.

There are about 60 sugar factories at home which in 2009 were able to produce 2.7 million tons of sugar, though their production has been showing a downward trend in the last two years.

"Only Rp1.5 trillion of the funds has been absorbed so many sugar mills have not been revitalized," Bayu said. Some Rp55-60 billion have also been allocated for the development of sugarcane seedling.

The decline in the production is expected not to affect the government plan to become sugar self-sufficient in 2014. Therefore, legislators called on the government to keep on monitoring the development of sugar industry in the country.

"The progress of the sugar self-efficiency road map program should be reported to the House once every six months through Commission VI," Chairman of Commission VI on trade and industry affairs Airlangga Hartarto said on Monday.

The Commission VI`s call is one of the conclusions reached during a joint-working meeting between Commission VI and the United Indonesia Cabinet ministers responsible for economic affairs.

He said that the government should evaluate and monitor its sugar road map program which among others covered national sugar production balance, action plans, achievement targets, schedules and budgets.

In the meeting, the House Commission VI asked the government to formulate a comprehensive system of incentives, subsidy program, land auditing, 350,000 hectares of land for sugar new cane plantations in support of the 2014 sugar self-reliant program.

Indonesia`s sugarcane plantations at present cover about 480,148 hectares in 2009. 

According to Agriculture Minister Suswono, based on the results of a survey, the country now has around 7.3 million hectares of idle land. Nearly 2 million hectares of the land could be used as farm land including sugarcane plantation.

So, if the acreage of plantations could be expanded and the number of sugar factories could be increased, it is expected that the country would become self-sufficient in sugar production and does not need to import the commodity.

So far, Indonesia has been importing sugar to cover the balance its sugar needs. Its own sugar production could only meet about 50 percent of its total industry and consumption needs amounting to 5 million tons per annum.

This year, over 200,000 tons of sugar still has to be imported to increase stocks. At the end of last May, the trade ministry issued licenses for the importation of 224,000 tons of raw sugar by seven sugar producers.

The licenses to import the sugar were among others issued for PT. Perkebunan Nusantara IX (12,600 ton), PT. Perkebunan Nusantara X (30,000 ton) and PT. Perkebunan Nusantara XI (22,800 ton).

Besides, the licenses were also issued for PT. Industri Gula Nusantara (100,000 ton), PT. Kebon Agung (7,000 ton), PT. Lajuperdana Indah (24,000 ton), and PT. PG. Gorontalo (27,800 ton).

But in a coordination meeting on Thursday, Trade Minister Mari Elka Pangestu explained that the companies which had been given the license to import sugar were unlikely to carry out the sugar import quota.

State-owned sugar producer companies that have obtained the quota will not realize some of their raw sugar import quota because they have no longer idle processing capacity to produce crystal white sugar in the current milling season.

"We have issued licenses for the importation of raw sugar but we have received a report that the proceeds of farmers` sugar cane are more than enough so that they will not realize their raw sugar import quota," Trade Minister Mari Elka Pangestu said.

President Director of PT Perkebunan Nusantara XI, Irwan Basri said that during the milling season this year, the capacity of state-owned sugar mills had been fully used to process sugar cane production

Source: ANTARA