Indonesia may not need to import white sugar next year due to high sugar stocks and an expected increase in domestic output, an industry official said on Thursday.
White sugar stocks have been piling up at warehouses as traders are reluctant to buy the sweetener because easing global prices have made imported white sugar cheaper, said Yamin Rahman, executive director of the Indonesia Refined Sugar Association.
"Sugar prices in the international market are much cheaper than prices in Indonesia. Traders don't want to buy local sugar as they are afraid to suffer loses, causing stocks to pile up," said Rahman. He said imported white sugar costs about 4,700 rupiah ($0.501) a kilogram, while local white sugar from the current cane milling season costs 5,150 rupiah ($0.549) a kilo.
The country consumed a total of 4.2 million tonnes of sugar for industrial and household use last year, of which 3.4 million tonnes was produced and refined locally while the rest was imported from Thailand and Australia. Indonesia has imported 450,000 tonnes of white sugar so far this year.
Stocks of white sugar at private and state sugar mills reached 884,421 tonnes as of October 31, according to data from the Indonesian Sugar Council. "White sugar imports may not be necessary next year, judging from the piling stocks. Even if we need to import, it will only be around 100,000 tonnes for buffer stocks," he said.
World raw sugar prices have fallen by around 17 percent so far this year because of a huge glut driven by the top two producers, Brazil and India, and other Asian countries such as Thailand and China.