Indonesia, Southeast's Asia biggest sugar consumer, has between 430,000 to 450,000 hectares of sugarcane plantations, and is estimated to produce 2.58 million tonnes of white sugar this year, according to agriculture ministry data.

"We actually have increased significantly our state budget for sugarcane plantation expansion in the year 2012, but the problem we are facing now is scarcity of suitable land that can be used for sugarcane cultivation," Deputy Agriculture Minister Bayu Krisnamurthi said.

The archipelago of 17,000 islands is targeting self-sufficiency by 2014.

Indonesia was once the world's second largest sugar exporter after Cuba in the 1930s. But ageing sugar mills, a vast network of smallholders and an influx of cheaper imported sugar put pressure on local production.

Prolonged rains in Java island, which supplies 60 percent of Indonesia's sugar output, delayed the domestic crushing season from May to June last year, and reduced the sugar content in cane, resulting in lower production.

Southeast Asia's biggest economy now imports more than 2 million tonnes of sugar -- both raw and white -- to meet household and industrial consumption.

Sugar imports for 2011/12 are projected at 2.841 million tonnes, up from 2.482 million tonnes in 2010/11, chairman of the Indonesian Sugar Association (AGI), said this week,

On Monday, Colo Sewoko, acting secretary for the AGI told Reuters that increased production and cheaper freight costs will enable India to become a leading sugar exporter to Indonesia from next year.

Copyright Reuters, 2011