Growth of rafinated sugar industry had the potential to undermine the sugar selft resiliency program proclaimed by the Government, because it tend to case aside local-sugar based sugarmills. The potential of penetration of rafinated sugar heigntened in line with the widening supply-and-demand gap. In consequence of this penetration, sugar products made of famers’ sugarcane would lose competition as their prices were higher than rafinated sugar. The further effect was that sugar mills would downsize their production and might even go bankrupt.
The Association of Indonesian Sugar and Flour Producers [Apegti] rated that the Government was unale to troubleshoot problems in the national sugar sector as indicated by penetration of rafinated sugar to the consumer’s market. Therefore the association urged the Government to announce the audit outcome of the case. Chairman of Apegti, Natsir Mansyur stated in Jakarta on Monday [23/12] that penetration of rafinated sugar to the consumers’ market was a disaster to national sugar industry.
Natsir rated that all turmoil happening in national sugar management was because the Government themselves were breaking the law and policies such as the policy of the Ministry of Agriculture, Ministry of Trade and Indonesian Sugar Council [DGI]. Natsir stressed that many cases sugar were ignored by the Government, so he demanded the Government to announce the audit outcome at once.
Apegti demanded that the Ministry of Trade and the Ministry of Industry be accountable for the penetration of rafinated sugar for the industry to the consumers’ market, causing farmers’ sugar to be unsold. Natsir stressed that the root of problem was when the Ministry of Industry acted as recommendatory for import of raw sugar for rafuinated sugar.
According to Natsir, leaking of rafinated sugar has been going on for the past 3 years, but he regretted the Minister of Industry and Minister of Trade who tend to be permissive to rafinated sugar year after year, without giving any sanction to rafinated sugar industry whose production leaked out to the open market. What made it worse, Natsir said each year import of raw sugar was approved by Commission VI of House and also by the Coordinating Minister of Economy which turned PTPN sugar products into victims.
Meanwhile the Ministry of Trade claimed that penetrtation level of rafinated sugar by 8 imported companies was 0% - 29%, meaning a downturn of 5% - 100% against 2011. The Director General of Domestic Trading of the Ministry of Trade, Srie Agustina stated that the figures were more than just assumption but they were based on auditing process officially exercised. Audit was exercised on 8 existing importers 3 new importers, 60 F&B industry, 110 markets in 15 provinces and regencies/cities.
According to Agustine, the Minister of Trade was not sitting on his laurels in facing the case of rafinated sugar penetration, but give punishment to import if there was still violation. To protect farmers, the Minister of Trade had stipulated Farmers Buying Price [HPP]. The prices were not just set from farmer’s viewpoint but also considering price stabilization at consumer’s level.
About the plan to import 300,000 tons of raw sugar by BULOG, Agustina said, it was still a proposition by BULOG to secure reserves of crystal sugar which in July 2014 was predicted to be minus 290,000 tons. She believed that the minus state happened was on account of increased F&B industry from 5% to 7% which means increased need.
Business News - December 30, 2013