October 6, 2023
JAKARTA – State-owned holding company ID Food plans to import 125,000 tonnes of sugar to calm the surge in the commodity’s domestic price .
ID Food said it had obtained a loan totaling Rp 1.5 trillion (US$95.97 million) from state-owned banks to execute its plan, which also aimed to anticipate the end of the sugar milling season in November.
“We will realize the rest of government’s order to import 250,000 tonnes of sugar this year, as we have only used half of [the quota]. We will use [the imported sugar] to secure the domestic stock,” ID Food president director Frans Marganda Tambunan said on Wednesday, as quoted by Tempo.
According to Frans, the country faced an annual deficit of 800,000 tonnes in the domestic sugar supply, so it still needed to import stock from other countries.
The government has fewer options for import sources this year, however, as India has imposed a ban on its sugar exports until next year, leaving only Brazil and Thailand as the potential sources.
India contributes around 30 percent of Indonesia’s annual sugar imports.
Frans said ID Food had opted to import sugar from Brazil instead of Thailand, because the specifications for Brazilian sugar more closely matched Indonesian demand. But he expected a longer delivery time due to geographical distance.
“We need almost two months until the sugar actually arrives in Indonesia,” he said on Sept. 8, as quoted by CNBC Indonesia.
Read also: India set to ban sugar exports for first time in 7 years
According to data from the National Food Agency (NFA), the retail price for sugar early this month has reached Rp 15,400 per kilogram, up 7.76 percent compared to the same period last year.
The figure is far above the government’s ceiling price of Rp 14,500 per kg set in August, after the price was raised last year by Rp 1,000 to Rp 13,500 per kg.
In July, the NFA hiked the farm gate price for sugar by Rp 1,000 to Rp 12,500 per kg to halt a downtrend and to spur national production, a move deemed necessary at the time to protect farmers from unfair prices at the start of the milling season.
Frans added that the farm gate price had been again increased to currently Rp 13,400 per kilogram, which would result in a higher ceiling price for consumers.
Read also: Farm gate price hike deemed too little to boost sugar output, achieve self-sufficiency
On Tuesday, the deputy attorney general for special crimes (Jampidsus) dispatched a team to search the Trade Ministry in connection with a corruption case involving sugar imports.
“I cannot talk much about that [the corruption probe], but I’m aware that the search is related to sugar imports conducted between 2015 and 2018,” said Frans, underlining that the ongoing investigation would not affect the government’s latest plan to import more sugar.