Indonesia is planning to develop an integrated raw sugar industry worth nearly $1.9 billion over the next five years in order to end its dependence on imports, an industry official said on Friday. The investment is needed to build 15 raw sugar mills and to develop at least 300,000 hectares of sugar cane plantations over the next five years, Suryo Alam, secretary general of AGRI, told reporters after a meeting with industry minister.
A recent spike in the sugar price has led to interest in boosting cane output. Domestic sugar prices surged to a record peak of above 11,000 rupiah ($1.16) per kg in September in line with global sugar prices, but have dropped back to below 10,000 in recent weeks. New York's raw sugar has rallied to a 28-and-1/2-year high of more than 24 cents per pound on the prospect of strong Indian buying after a poor monsoon decimated the country's cane crop.
Indonesia still relies entirely on imports of raw sugar, which is seen at over 2 million tonnes this year, to supply its eight refiners. By regulation, sugar refiners can only sell white sugar processed from imported raw sugar to the food industry. Southeast Asia's biggest consumer of the sweetener, however, is scaling back imports of white sugar for direct consumption because of a recent rise in local white sugar output.
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