Indonesia has revised down its expected white sugar production for this year by 31 percent because of a lack of expansion in cane plantations and stalled efforts to modernise ageing sugar mills, said an agriculture ministry official on Wednesday.
Lower output from Indonesia, Southeast Asia's largest sugar consumer, would mean the country may have to import more white sugar to meet domestic demand.
Indonesia expects to produce 2.69 million tonnes of white sugar this year, down from an initial target of 3.88 million tonnes, said Agus Hasanuddin Rahman, director of annual crops at the agriculture ministry. "Expansion of cane plantations is not happening as planned in the road map of sugar self-sufficiency, because the forestry ministry has not yet issued land use permits," said Rahman.
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. Southeast Asia's biggest economy now imports more than 2 million tonnes of sugar - both raw and white - to meet household and industrial consumption.
The government has already issued a permit to import a total of 450,000 tonnes of white sugar for household consumption until the cane crushing season starts in May this year to bridge an anticipated fall in domestic production. But so far importers have only bought 50,000 tonnes because of high regional prices and ample local stocks, with several recent tenders failing to secure white sugar.