During the last 10 years, as many as 10 new sugar factories have been established. However, the operation of the new factories has not brought a signification contribution to national sugar production.
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KOMPAS EDITOR
·3 minutes read
KOMPASTotok Wijayanto
Transport workers arrange refined sugar that has been transferred onto trucks at Tanjung Priok Port, Jakarta, Tuesday (6/4/2021). Refined sugar comes from India using the Margaret SW Ship.
The easing of licensing procedures to import raw sugar for public consumption needs to be clarified as it goes against the government’s program to increase domestic production.
The industrial ministerial regulation concerning the guaranteed availability of raw sugar to meet national sugar demand allows the sugarcane industry to import raw sugar for the production of white crystal sugar (GKP) or consumption sugar, provided that the raw materials from local sources are not sufficient. The import permits can be issued to the local sugarcane industry under certain conditions and have a permit issued after 25 May, 2010 to conduct business expansion.
The easing of licensing procedures to import raw sugar for consumption comes amid the government\'s plan to increase the production to achieve self-sufficiency in sugar production by 2023. As part of the programs to meet the target, the government will provide financial incentives for the establishment of new factories even if they are not supported by sugarcane plantations.
During the last 10 years, as many as 10 new sugar factories have been established. However, the operation of the new factories has not brought a signification contribution to national sugar production. The government estimates that the demand for white crystal sugar will reach 2.8 million tons a year until 2023, while the national production is projected to reach 2.18 million tons a year. The government’s road map to achieve self-efficiency in sugar production by 2023 was presented during the National Sugar Summit in November 2020. Under the road map, the shortage of sugar production will be overcome by expanding sugarcane plantation areas and rising the sugar recovery rate (rendement ), as well as the addition of sugar factories outside Java. In addition, 11 refined sugar-based factories will be encouraged to produce sugarcane-based sugar.
Sugar stocks in early 2021, according to the Indonesian Association of Sugarcane Farmers, stands at around 800,000 tons, enough to meet the demand for the next four months. The import quota for raw sugar for the January-May period is set at 646,944 tons. Farmers are worried that the imported sugar will push down prices of consumption sugar. Farmers had to accept the price for 2020 production at below Rp 11,000 per kilogram, although it ideally should reach Rp 14,500 per kilogram.
If the government is serious in its plan to achieve self-efficiency in sugar production, it must set up a comprehensive strategy in developing the sugarcane-based sugar industry with the support of reliable data. The data should be based on a comprehensive audit of sugar demand, industrial users, sugarcane plantation areas that must be in line with the new sugar factory establishment permits, and plantation areas, sugarcane productivity, as well as import quota and distribution. The operation of the sugar factories that are not supported by sugarcane plantations must be evaluated, unless they are allowed only to produce sugar for export.
In designing strategies, the government must consider the creation of jobs as stated in the newly issued Job Creation Law and improve the standard of living of farmers. We also need to consider the foreign exchange we have to spend to finance imports. In addition, we also face many nutritional problems and the threat of diabetes and excessive sugar consumption is not recommended.
This article was translated by Hendarsyah Tarmizi.
