There was a stir in the public over the issue of sugar imports ahead of the General Election, which will take place in a few months. Initially, the University of Indonesia Economist Faisal Basri revealed this issue last week. He showed Statista’s data that said Indonesia had become the largest sugar importer in the world.
Based on the data, Indonesia ranked first as the world’s largest sugar importer for the period of 2017-2018, with an import volume of 4.45 million tons. It outperformed China in second place with 4.2 million tons and the US with 3.11 million tons.
“I was shocked to see the data. Indonesia has become the largest importer in the world,” he said in Jakarta, Monday (1/14). Previously, Indonesia was still in third or fourth place.
Faisal then cited the upward trend of sugar imports based on data from the Statistics Indonesia (BPS), which showed that Indonesian sugar imports began to surge in 2009 after falling earlier. At the time, Indonesia imported 1.4 million tons of sugar domestically.
Afterwards, the sugar imports slowly rose until 2015. In 2016, the volume of sugar imports skyrocketed to 4.8 million tons, rising 1.4 million tons from the previous year. This drastic increase in imports occurred when Enggartiasto Lukita was appointed as the Minister of Trade. Since then, the number of Indonesian sugar imports has always been above 4.5 million tons per year.
Faisal was surprised that there was a significant increase in imports during the period, even though at the time there was no high increase in sugar consumption. Although there was a decline in domestic production, the number of national sugar stocks increased because of high imports. “If there is a lot of stock, the import quota should not be added,” he said during the Indef press conference entitled “Sweetness of Rent Seeking in Sugar Imports” in Jakarta, Monday (1/14).
Results of a study from the Institute for Development of Economics and Finance (Indef) revealed the existence of irregularities in national sugar policies and balance sheets. The irregularities can be seen from the determination of import quotas. The quotas determined by the government were higher than domestic sugar needs.
In 2018, the Ministry of Industry has projected the needs of refined sugar for industry at 2.8 million tons. However, the Ministry of Trade instead gave more import quota of up to 3.6 million tons.
There has been a lot of criticism about this policy. There are also concerns that previous cases will recur, such as the imported refined sugar that should only be used for industrial needs was also circulating in the market for consumption needs. In fact, the realisation of refined sugar imports reached 3.37 million tons over the past year.
“It proves that the imported sugar is not only for industrial needs, but also for consumption needs,” Indef Researcher Ahmad Heri Firdaus said in Jakarta, Monday (1/14). The government has actually banned the sales of refined sugar for consumption needs as it is not good for health.
Not only opening the refined sugar import for industry, the government also gave sugar import quota of 1.1 million tons for production even though until the middle of last year the sugar stock for consumption from domestic production and the rest of the previous imports was still in surplus by 3.7 tons.
According to the Minister of Trade Enggartiasto Lukita, the decision to import sugar was taken because domestic sugar production was still not enough to meet consumption and industrial needs. “We do imports based on needs,” Enggartiasto said in his office, Thursday (1/10).
As if supporting Enggartiasto, the Economic Coordinating Minister Darmin Nasution said the sugar import was intended for industrial rather than consumption needs. According to him, it was also a recommendation from the Ministry of Industry. “It is sugar for industry. We do not import sugar for consumption. Not available for this year. Not yet,” he said at the Office of the Economic Coordinating Ministry in Jakarta, Wednesday (1/9).