Indonesia's Cupboards Could be Bare Of White Sugar Within Two Months Indonesia is in danger of running out of white sugar by early February and shortages in producing countries will make importing additional supplies expensive, industry and government officials said on Friday.
Natsir Mansyur, chairman of the Association of Sugar and Flour Traders (Apegti), said Indonesia now has less than 500,000 tons of white sugar in stock, while it consumes 200,000 tons to 250,000 tons per month. This means that the country would need about twice its current stock to last until the milling season starts at the end of April. "With current stock levels, we will only be able to get by until the end of January," Natsir said. Achmad Mangga Barani, the director general of plantations at the Ministry of Agriculture, on Friday estimated that the current supply of white sugar would only last until February and acknowledged that the government was aware of the possible crisis. "The government will take all the necessary steps to ensure an adequate sugar supply," he said. Mangga said the total national sugar output for 2009 is now projected at 2.67 million tons, down from a previous estimate of 2.95 million tons. Domestic demand was estimated at 5.15 million tons. The government warned last month that the country faced a projected sugar shortage of 1.2 million tons through June, as the production capacity of domestic producers had failed to keep pace with rising demand. In September, the government lifted limits on sugar imports and slashed import duties to bolster stocks. Meanwhile, traditional sugar exporters, such as India, Brazil and Malaysia, are also suffering from a sugar deficit. The price of sugar on the international market had soared by more than 80 percent as of September, when it hit a 28-year high. The increase is partly due to drought in India and heavy rains in Brazil, which are the world's two largest producers. India, the world's largest producer, is expected to import nearly six million tons this year more than a quarter of its domestic demand. The retail price of white sugar in Jakarta has soared this year, from Rp 6,649 (70 cents) per kilogram in January to a peak of Rp 10,700 during the Idul Fitri holiday in September. The price is now at Rp 10,500. The Coordinating Ministry for the Economy is currently in talks with related departments about raising the quota for sugar imports, Mangga said. Last month the country's four state-owned banks committed to lending the domestic sugar industry $1 billion to upgrade production facilities, which are mostly outdated. However, Trade Ministry officials declined to comment further on their plans to import more white sugar. The public consumes white sugar while the industry uses raw sugar, including in the production of white sugar.
