INDONESIA – Indonesia’s state-owned plantation PT Perkebunan Nusantara (PTPN) has called on the government to limit sugar imports in an effort to bolster domestic production and support local farmers who struggle to compete with foreign producers.
PTPN President Director Mohammad Abdul Ghani emphasized the need for increased productivity among farmers to remain competitive.
Currently, Indonesian sugar farmers produce around 4 tonnes of sugar per hectare (ha), which is half the productivity needed to compete with foreign producers.
Ghani stressed that farmers must increase their output to 8 tonnes per hectare to lower production costs and make local sugar more competitive.
“Before farmers can reach that productivity [level], please protect us. If we allow excessive sugar imports, our farmers will perish, and they will not be able to improve their agronomy,” Ghani told lawmakers.
By achieving the target productivity, farmers could reduce their production costs from Rp 9,700 (US$0.59) per kilogram to Rp 6,300 (US$0.39) per kilogram.
Consequently, the farmgate price could drop from the current Rp 14,500 (US$0.89) per kilogram to Rp 12,000 (US$0.73) per kilogram. Imported sugar, by comparison, is priced at around Rp 10,000 (US$0.61) per kilogram, making it more attractive to consumers.
Indonesia currently relies on sugar imports to meet domestic demand, as local production accounts for less than half of the country’s needs. However, the government aims to achieve sugar self-sufficiency by 2028.
As part of this initiative, plans were announced in April to expand sugarcane planting in the eastern region of Papua, with the goal of reducing imports and developing a sugar-based industry, including bioethanol production.
Investment Minister Bahlil Lahadalia highlighted the identification of 2 million hectares (4.9 million acres) of land in Merauke, South Papua province, for an industrial estate dedicated to sugarcane plantations, mills, a bioethanol plant, and a biomass power plant.
“For the first phase, there will be two million seedlings coming from Australia,” Bahlil said, noting that domestic companies, including state-owned firms, will lead the project.
Indonesia’s Vice President Ma’ruf Amin expressed his support for the development of South Papua province as a sugar industry center.
He emphasized the need for such initiatives considering the country’s increasing reliance on sugar imports, which amounted to six million tons in 2023. With the population projected to reach 300 million by 2045, Amin stressed the importance of developing Merauke into a major agricultural and plantation hub, including for sugarcane.
Amin also expressed hope that the plantations in Merauke will be successful in producing sugarcane with a sugar content of more than 11 percent, similar to the levels achieved in Australia.
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