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Central Statistic Agency: National Sugar Production Deficit By 63 Percent

Thursday, 05 Dec 2024

The stakeholders in the sugar production industry face significant challenges that require urgent attention. According to data from the Central Statistics Agency (BPS) covering the period from 2016 to 2023, the national sugar production has experienced a deficit, with a gap percentage reaching 63 percent. In 2023, the annual national sugar demand is approximately 6.08 million tons, while the domestic production capacity is limited to only 2.27 million tons per year.


Consequently, to meet this demand, Indonesia continues to rely on sugar imports for both industrial and domestic needs. Tri Yuniarti, the Director of the Economic and Monetary Policy Department at Bank Indonesia (BI), noted that one of the contributing factors to the sugar deficit is the relatively small area of sugarcane cultivation in Indonesia compared to other countries.


"The total area of sugarcane cultivation in the country is 0.2 million hectares, which is quite small compared to Brazil's 10 million hectares and India's 4.5 million hectares," she stated during the National Sugar Summit 2024 at Kebon Agung Sugar Factory in Malang on Wednesday, December 4, 2024. Furthermore, in terms of sugarcane productivity, Indonesia produces only 60 tons per hectare, significantly lagging behind Brazil's 80 tons per hectare, India's 100 tons per hectare, Thailand's 82 tons per hectare, and Australia's 85 tons per hectare.


"This indicates that there is a pressing need to enhance productivity," she explained. Another issue lies in the processing of sugarcane; among the 64 sugar factories in Indonesia, including both white crystal sugar (GKP) and refined crystal sugar (GKR) factories, 52 percent have relatively limited capacity, and 62 percent of these factories are considered old, with ages ranging from 100 to 184 years.


The supply remains reliant on smallholder plantations, he stated. Consequently, Tri recommended several measures to sugar industry stakeholders, particularly participants of the National Sugar Summit 2024, aimed at enhancing national sugarcane productivity.


These measures include expanding the area dedicated to sugarcane cultivation, improving land productivity through the use of superior varieties, and regularly managing and harvesting ratoons. Additionally, strengthening collaboration between farmers and factories is essential to promote the production of white crystal sugar (GKP) and to revitalize small-capacity factory machinery.


Furthermore, there is a need to bolster support for sugar imports to regulate prices, which involves reinforcing the implementation of producer and retail price limits, as well as enhancing the management of sugar imports and distribution. "This is crucial, as the magnitude of imports has historically influenced price formation based on external conditions," he concluded. (ferry@insightinnews.com)



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