Indonesia, Southeast Asia's largest sugar consumer, will import 240,000 tons of raw sugar this year to meet domestic demand for white sugar, local media reported Wednesday.
The plan was made as the domestic demand of white sugar from January to May stood at 860,000 tons, while the country's production would only amount to 598,578 tons of white sugar, leaving a deficit of 261,422 tons, Agriculture Minister Suswono Arsyaf was quoted as saying.
The 240,000 tons of raw sugar would be processed into 220,000 tons of white sugar, the minister said. "We will suffer a deficit for one month, or around 220,000 tons of white sugar," he was quoted by the Jakarta Post as saying.
Suswono said that the decision to import raw sugar was partly to allow local mills to increase production. The final decision on importing the sugar would be made during a meeting at the Office of the Coordinating Economic Minister next week, he said.
Indonesia imported 118,129 tons of white sugar last year. Indonesian Sugar Association data shows Thailand supplied 60 percent of Indonesia's imported sugar, followed by Brazil (20 percent) and Australia (10 percent).
Indonesia's sugar industry saw production decline by 30 percent from 1995 to 2000 due to the closing of a number of out-of- date mills.
Total demand for sugar by households and micro-industries is estimated to reach around 2.8 million tons this year, a 3.7 percent increase from last year. Last year, national output was about 2.2 million tons.
The decision to import sugar has always been problematic for the government as local farmers continue to suffer from a limited income. More than 1,000 sugarcane farmers from various parts of the country demonstrated in front of the Trade Ministry in Jakarta in December, demanding a ban on sugar imports.
Sugarcane Smallholder Farmers Association Member Soemitro Samadikoen said his association expected sugar output to increase this year as farming practices had been improved. However, local production output could not be estimated yet, he said. Indonesia' s plantation productivity is estimated to be about half of that of Thailand, resulting in lower output, according to Soemitro.
Indonesia was the world's second-biggest sugar exporter after Cuba in the 1930s. Local production decreased later due to aging sugar mills and inflows of imported sugar.