Govt Affirms Raw Sugar Import to Stabilize Prices

"The government's efforts to lower the price of sugar involve various parties, one of which is the BUMN state company. In a Limited Meeting of the Coordinating Ministry for Economic Affairs, PTPN has committed to lowering the price of sugar to Rp12,500 per kilogram," said Trade Minister Thomas Lembong in a working meeting with the Indonesian House of Representatives in Jakarta on Thursday evening.

Thomas said that PTPN plans to provide a guarantee of certain income for sugar cane farmers equivalent to a yield of 8.5 percent through a new system, namely the purchase of raw sugar cane at Rp55,652 per quintal.

Thomas explained that the system is an update of the previous profit-sharing system, in which PTPN believes that the system of guaranteeing farmers' incomes requires a huge cost, most of which can be taken from the processing of raw sugar equivalent to 381,000 tons.

"It is hoped that PTPN can provide permission for the importation of raw sugar and can process it after the milling season is finished, namely in October 2016, in order to replenish the early 2017 stock. It is hoped that this approach can lower the price of sugar and provide income guarantees for sugar cane farmers in the future," Thomas said.

Thomas added that as of now, his party has not yet issued a permit for the importation of raw sugar, but soon a discussion will be held during a coordination meeting because the decision cannot be postponed for too long.

"It is true that the permit has not yet been issued. Perhaps in the coming week, we will hold a food coordination meeting and we cannot postpone it too long. Perhaps in the coming week, a decision will be made," Thomas said.

Meanwhile, the Chairman of the Indonesian Sugarcane Farmers Association (APTRI), Abdul Wachid, supports the government's plan to import 381,000 tons of raw sugar.

"The importation of raw sugar, which will be carried out by PTPN X, is a policy that will increase the milling capacity of the sugar factories owned by PTPN," Wachid said.

The government, through Ministry of State-Owned Enterprises Letter Number S-288/MBU/05/2016, has submitted a request to the Minister of Trade, Minister of Agriculture and Minister of Industry for a raw sugar import permit.

The government has also assigned PT Perkebunan Nusantara (PTPN) X to carry out the raw sugar importation, which will later be allocated to PTPN IX, PTPN X, PTPN XI, PTPN XII, PT PG Rajawali I and PT PG Rajawali II.