Year-ender: SUGAR PRICES RISING IN RUNUP TO NEW YEAR FESTIVITIES By Andi Abdussalam

Jakarta, Dec 22 (ANTARA) - Sugar prices in various parts of the country are showing an upward trend in the runup to the Christmas and New Year festivities with the highest price recorded at Rp12,000 per kg in Samarinda, East Kalimantan, and the lowest at Rp8,500 per kg in Bandar Lampung, Sumatra.

"Sugar prices are going up due to psychological factors as a result of declining sugar stocks which were only 400,000 tons. At the end of a year we should have a stock of at least one million," chairman of the Wheat and Sugar Traders Association (Apegti), Natsir Mansyur said here on Tuesday.

Because of the shortage of stocks, traders who have stocks are raising the prices of their sugar. After all, the sugar the government is planning to import has not yet arrived. The government is importing 500,000 tons of white crystal sugar this month, according to State Enterprises (BUMN) Minister Mustafa Abubakar.

"We hope that the sugar will be imported from Thailand. We are also open to sugar imported from China and India," the minister said early this month.

For the importation and supply of white crystal sugar the government has appointed state-owned plantation company PT Perkebunan Nusantara (PTPN), state-owned sugar distribution company PT Rajawali Nusantara Indonesia (RNI) and state-owned logistics firm Perum Bulog. "The three state-owned companies have been appointed as registered importers," he said.

However, the imports have not yet arrived, while stocks are now depleting causing the sugar prices to rise. Natsir Mansyur said the prices were expected to continue to increase until early next year, owing to the fact that the price of sugar in the world market had reached over US$700 per ton.

"Early next year, the price could increase to a level higher than now. The price now has reached US$700 per ton. If the import duties, value added tax, insurance and unloading costs are calculated, the price of sugar could rise to Rp10,500 per kg. So, at the retailer level it will sold at Rp11,000 per kg," he said.

Natsir said that the government's plan to import 500,000 tons of white crystal sugar by six state-owned firms within the January 1, 2009 - April 15, 2010 period, had raised the price of sugar in the world market.

"The need to import 500.000 tons of sugar could affect the world price," he said. Thus, the government should have made import plan since the beginning of the year so that price would not be affected when the import was realized.

According to Minister Mustafa Abubakar, the government could not avoid importing white crystal sugar imports because the country?s sugar production depended very much on the climate which could not be predicted.

The minister did not reveal the volume of the sugar that should be imported by each of the three companies that had been appointed by the government. Abubakar said earlier that sugar consumption in April 2010 would reach 1.2 million tons while stocks at home were only about 610,000 tons, leaving a deficit of 500,000 tons.

Therefore, to cover the deficit, the government decided to import about 500,000 tons of sugar. In order to meet the national need for sugar, the government in the middle term was planning to increase the designed capacity of its domestic sugar production in 2025.

For the need of industry, it will raise its production from the present 2.1 million tons to 3.3 million tons while for sugar consumption it will increase its production from the present 2.7 million to 5.6 million tons.

With regard to the increasing trend of sugar price, the government has decided to provide subsidized sugar for the needy, a program which is like the subsidized rice for the poor that has been implemented so far, according to a deputy minister.

Deputy Agriculture Minister Bayu Krisnamurthi said recently that the subsidized sugar was intended for certain groups of people, or certain target families (RTS).

"So, this a targeted recipient subsidy," he said after a gathering with recipients of Food Resilience Awards 2009 at the Agriculture Ministry Building on Tuesday.

He said that the subsidy would be provided in anticipation of the increase in the price of the commodity following the projected decline of stocks in the country.

The deputy minister said that in the January - April 2010 period there would be no sugar milling activities at home and production this year was estimated to miss the target.

Therefore, in order to anticipate shortage of sugar stocks efforts to increase the stocks were made far before that arrival of the period.

Krisnamurthi did not disclose the value of subsidized sugar the government would provide for the target families this year, neither did he mention the number of target families which would received the facility.

Now prices of sugar have been increasing in various provinces. The price per kg of sugar in Jember, East Java, for example has increased from Rp9,000 to Rp11,000, some even sold it at Rp11.500 per kg.

In the traditional markets in Riau, Sumatra, the price of sugar has also risen from Rp8,000 to Rp12,000 per kg. In Kendari, South East Sulawesi, sugar price increased from Rp9.500 to Rp11,500 per kg.