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Published October 28, 2013, 11:16 AM

Indonesia cuts white sugar forecast

Wet weather prompts a 6 percent decrease.

By: Reuters, Reuters

JAKARTA — Indonesia, the world’s top importer of raw sugar, has cut its estimate for white sugar production this year to 2.54 million metric tons, down 6 percent from 2.71 million forecast earlier, as wet weather hits supplies, the farm minister says.

Indonesia’s white sugar output was 2.59 million metric tons last year, Agriculture Minister Suswono says.

“We estimated white sugar output in 2013 to reach 2.54 million (metric) tons,” he adds.

Indonesia splits its sugar market, with raw sugar imports going mostly to satisfy rapidly expanding demand from industry, such as the food and beverage sectors, while domestic sugarcane farmers supply local mills and feed consumer demand.

Recently Indonesia surprised the market with a hike of 52 percent in its expectations for imports of raw sugar in 2013, to 3.8 million metric tons.

The industry estimates that raw sugar imports could more than double to 5.4 million metric tons this year from 2.5 million last year.

The rise in raw sugar imports has surprised the Association of Sugarcane Farmers.

“The government is killing sugarcane farmers by allowing new sugar refineries and white sugar mills that use imports to be built in Indonesia,” association chairman Arum Sabil says.

Southeast Asia’s biggest economy has abandoned a goal of attaining self-sufficiency in white sugar by 2014, after efforts to lift output got snarled in red tape over land licenses, besides competition for land and under-investment.

Indonesia ships in raw sugar from Australia, Brazil and Thailand.