Indonesian Government to Decide New Raw Sugar Import Quotas for 2020

Indonesian refiners, the world’s biggest sugar importer, are to boost raw sugar imports by overseas countries due to the food and beverage industry is annually growing. And, The government is gathering information on food industry demand as well as consider raw sugar import quotas for this 2020.

Processors will probably buy 3.3 million tons of raw sugar from abroad, up from 2.6 million tons this year, according to Bernardi Dharmawan, chairman of the Indonesia Sugar Refiners Association. Still, that doesn’t signal much of a change in refined production, which will stay at around 3 million tons, he said. That’s because output this year was supported by raw sugar stockpiles carried over from last year.

Southeast Asia’s largest economy has boosted food consumption in the past decade as rising affluence changes diets and lifestyles. Indonesia is now the world’s second-largest importer of wheat and biggest consumer of palm oil, part of which is used in an ambitious biodiesel program.

Sugar demand from food and drink manufacturers is stable, Dharmawan said in Jakarta on Wednesday. “We’re trying to be more realistic. We cannot be naive and see growth, when we don’t exactly know the consumption number,” he said. “There’s also a trend to replace refined sugar with artificial sweeteners. We see consumption staying around 3 million tons in 2020.”

The government is gathering information on food industry demand and may decide raw sugar import quotas for 2020, according to Industry Minister Agus Gumiwang Kartasasmita. Allocations for the first half will account for 60% of the total quota to meet rising demand for Eid al-Fitr in May.

“The food and beverage industry is growing by 7%-8% annually, but what we need to know is how big demand for refined sugar is. We have only an assumption and we need to conduct a thorough survey,” Dharmawan said.

Indonesian Refiners to Boost Raw Sugar Imports on Steady Demand. Source by The Indonesia Sugar Refiners Association and Bloomberg

The refiners import most of their raw sugar from Thailand and Australia. They are open to buying supplies from India once the Indonesian government has adjusted the so-called Icumsa level, a standard set by the International Commission for Uniform Methods of Sugar Analysis, Dharmawan said.

Recently, the Indonesian Trade Ministry is in the process of revising the rule, which will include lowering the Icumsa level for raw sugar imports to 600 from 1,200, Director General of Foreign Trade Indrasari Wisnu Wardhana, said on Wednesday. The regulation will be issued as soon as possible, he said.