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Indonesia’s Sugar Demand Projected to Increase 6% Next Year

Jakarta. Indonesia will need 3.6 million tons of sugar for industrial use next year, compared with this year’s 3.4 million tons, according to an estimation by the Ministry of Industry.

Panggah Susanto, agro-industry director general at the ministry, said sugar demand will increase due to 8 percent growth expected in the country’s food and beverage industry next year.

Most of the sugar is still imported because local producers struggle with old and inefficient machinery and low productivity.

Panggah said national sugar demand amounted to 5.7 million tons in 2016, with 2.9 million tons taken up by industrial manufacturers and the remainder going to direct consumers.

Indonesia produced 2.2 million tons of sugar last year, with 1.2 million tons produced by state-owned enterprises and the remainder by private companies.

The ministry currently offers incentives for investors to build sugar factories in Indonesia by issuing licenses to import raw sugar.

“The incentive is offered to develop a local sugar industry that is integrated with sugar cane plantations,” Panggah said during a meeting with the Indonesian Refined Sugar Association (AGRI) in Jakarta on Tuesday (12/12).

President Joko “Jokowi” Widodo has made Indonesian self-sufficiency in rice, corn, soybean and sugar production as one of the goals of his presidency.

“Importing sugar has to be stopped within the next three years and we should be able to grow it ourselves,” said Wilistra Danny, assistant deputy for plantations and horticulture at the Coordinating Ministry for Economic Affairs.

He said domestic sugar producers are currently unable to meet the national demand and the government has considered three steps to raise production.

“First, accelerate the development of sugar cane for industrial needs. Second, delivering raw materials that sugar cane plantations cannot provide and thus ensure that machinery is used optimally. Third, offering incentives for those who want to build new sugar factories,” he explained.

The Jakarta Globe