What is Indonesia's Raw Sugar Production and Import?

Data from the Indonesian Sugar Association (AGI) shows that domestic raw sugar production has been declining over the past three years. In 2016, raw sugar production was only 2.21 million tons, down from 2.48 million tons the previous year. This production decrease resulted in a rise in raw sugar imports, reaching 3.2 million tons last year. This year, the raw sugar import quota could reach 3.4 million tons, with a production target of 2.7 million tons. Although still a projection, this import quota is the largest in at least the last seven years.

As is known, the Ministry of Trade has issued Trade Minister Regulation No. 16/M-DAG/PER/2017 concerning the trade of refined white sugar (GKR) through commodity auctions. With the issuance of this regulation, GKR is only traded through an online commodity auction mechanism. This policy has drawn both praise and criticism, particularly from small and medium-sized enterprises (SMEs).

Some argue that the refined sugar auction policy can provide easy access for SMEs to obtain sugar at competitive prices. Others believe that SMEs and small and medium-sized industries (SMIs), which are largely owned by the lower and middle classes, will find it difficult to access this auction market.