Behind the Government's Decision to Import 200,000 Tons of Raw Sugar in 2025

Initially, the government was committed to not importing sugar to meet the national consumption needs. However, that commitment has changed. The government decided to import raw sugar to increase the government's sugar reserves. What is behind this decision?

The import of 200,000 tons of raw sugar was decided in a coordination meeting at the Coordinating Ministry for Food on February 12, 2025. Previously, on December 9, 2024, Coordinating Minister for Food Zulkifli Hasan stated that the government would not import rice, feed corn, and sugar and table salt (Kompas, 10/12/2024).

Behind the decision to plan sugar imports, the national consumption sugar production in 2025, which is targeted at 2.6 million tons, is expected to remain undisturbed. In fact, the national consumption sugar production in 2024, which is 2.46 million tons, is higher compared to 2023, which reached 2.2 million tons.

Behind the import plan, there are also several considerations and options besides importing. Government sugar reserves (CGP) are dwindling, the price of consumer sugar in the market is high, and much of the consumer sugar stock is in the hands of private traders.

An option other than importing, namely milling the remaining stock of imported raw sugar into white crystal sugar or consumption, is also limited. State-owned sugar factories are ready to mill the remaining imported raw sugar, but several private sugar factories are currently maintaining their milling machines in preparation for the sugarcane milling season in May 2025.

The Head of the National Food Agency (Bapanas), Arief Prasetyo Adi, on Thursday (February 13, 2025), confirmed the decision to import 200,000 tons of raw sugar for CGP. The sugar import was based on a proposal or request from the Minister of Agriculture and was decided in a coordination meeting at the Coordinating Ministry for Food Affairs.

"So we decided to import raw sugar in a measured manner, which is only 200,000 tons. Usually it can reach 700,000 tons. We will lock the imported sugar for CGP," said Arief when contacted by Kompas from Jakarta.

We have decided to import raw sugar in a measured manner, which is only 200,000 tons. Usually, it can reach up to 700,000 tons. The imported sugar will be reserved for the government's sugar stockpile.

Arief explained that the import of raw sugar will be carried out by state-owned enterprises (BUMN). It could be Perum Bulog, ID Food, or PT Sinergi Gula Nusantara (SGN) depending on the decision of the Minister of BUMN. It is highly likely that the processing of raw sugar into consumer sugar will also be evenly distributed among these three BUMNs.

Currently, ID Food is also striving to expedite the processing of the remaining stock of imported raw sugar, amounting to 62,000 tons, into consumable sugar. Of that amount, 10,000 tons belong to ID Food and 52,000 tons have already been purchased by traders.

Arief also emphasized that sugar production in 2024 is not a problem. Sugar production in 2025 is also expected to be unaffected. However, currently, the government's sugar stock is running low. The government's CGP in Bulog, ID Food, and SGN warehouses must be removed to be replaced with new stock.

Most of the sugar stocks in the warehouses of several state-owned sugar factories have also been purchased or owned by traders. SGN, a subholding of PT Perkebunan Nusantara, for example, stores around 200,000 tons of consumer sugar owned by traders that will be released in February-March 2025.

"The price of consumer sugar at the retail level has increased to around Rp17,500-Rp20,000 per kilogram (kg) depending on the region. As of January 2025, the sugar inflation rate has reached 1.4 percent," he said.

Arief will also ensure that the price of sugar at the farmer level should not be at the government's reference purchase price of IDR 14,500 per kg. On the other hand, the price of sugar during Ramadan-Lebaran 2025 will also be suppressed below IDR 18,000 per kg.

The sugar import plan was actually revealed in the National Coordination Meeting for Stabilizing Food Supply and Prices for Ramadhan-Lebaran 2025 held by Bapanas in a hybrid manner in Jakarta, Wednesday, 12/2/2025). The meeting was attended by representatives of the central and regional governments, as well as business actors in various food sectors.

Some of them are the Executive Secretary of the Indonesian Sugar Producers Association (Gapgindo) Enny Ratnaningtyas, Director of Supply Chain Management and Information Technology ID Food Bernadetta Raras, and General Chairperson of the Indonesian Sugarcane Farmers Association (APTRI) Soemitro Samadikoen.

Enny said, sugar stocks in sugar factories in Indonesia as of the end of December 2024 were around 980,000 tons. Meanwhile, national sugar needs in early January 2025 until the sugarcane grinding season in May 2024 were around 1,250,000 tons.

Even if there is still a remaining stock of imported raw sugar from last year, it cannot be milled yet. Currently, a number of sugar factories are in the process of maintaining milling equipment to prepare for the sugarcane milling season in May 2025.

"The national sugar stock is tight. We need to be aware of this. If we only grind sugarcane after Lebaran, how will we fulfill sugar consumption during Ramadhan-Lebaran 2025," he said.

Responding to this, Arief said, Bapanas has a food balance calculation, including sugar. The stock of consumption sugar at the end of 2024 which is used as the initial stock for 2025 is around 1 million tons.

The stock of imported raw sugar in a number of sugar factories ready to be milled into consumption sugar is around 60,000-80,000 tons. Meanwhile, national sugar needs in January-May 2025 are estimated at around 1.25 million tons.

"On the other hand, sugarcane harvests in several regions in Indonesia have started in April 2025. Taking these things into consideration, sugar stocks should be sufficient to meet sugar needs in February-March 2025 or during Ramadhan-Lebaran 2025," he said.

However, Arief continued, when it comes to government sugar reserves (CGP), Indonesia needs to import sugar of around 230,000-300,000 tons. However, the government is still considering whether it is in the form of raw sugar or white crystal sugar.

If the import is in the form of white crystal sugar, it will not educate sugar factories in Indonesia. Another option is to accelerate the processing of the remaining stock of imported raw sugar of 60,000-80,000 tons to be made into white crystal sugar.

"Everything still needs to be discussed. The price of sugar at the farmer level and in the retail market also needs to be considered. It is indeed a dilemma, especially if the stock is completely controlled by the private sector. ID Food, SGN, and Bulog should have sugar stock. Not selling all their stock," he said.

On that occasion, ID Food also explained the CGP managed by PT RNI in 2025. Referring to the Government Work Plan in 2025, RNI is targeted to have a CGP of 268,000 tons of consumption sugar. Of that amount, 40,476 tons are for regular distribution and 63,267 tons are stocks for national religious holidays (HBKN).

"We will not release our stock of 63,267 tonnes of consumable sugar. "The stock is only used as a reserve for HBKN needs," said Raras.

APTRI hopes the government will not import sugar. Because, national sugar production in 2024 is 2.46 million tons.

Meanwhile, APTRI hopes that the government will not import sugar. This is because national sugar production in 2024, which is 2.46 million tons, is higher than in 2023 which was 2.2 million tons. This year, the government is targeting national consumption sugar production of 2.6 million tons.

In addition, sugar stocks in sugar factories in Indonesia as of early February 2025 plus stocks at the distributor, trader, ID Food levels, as well as a small potential for sugarcane milling in March and April 2025 will still be sufficient until the sugarcane milling season in May 2025.

Soemitro explained, based on the results of the recapitulation of the physical stock of white crystal sugar by the Directorate General of the Ministry of Agriculture as of January 31, 2025, the total stock of white crystal sugar in the warehouses of state-owned and private sugar factories was 842,517.21 tons. The stock of 842,517.21 tons was the initial stock for February 2025.

Of that amount, sugar stock owned by PG is 364,688.88 tons, farmers 10,604.4 tons, traders 463,491.63 tons, and Bolog 3,732.3 tons. While the normal need for national sugar consumption in a month is around 225,000-250,000 tons.

This means that the total sugar requirement in February 2025 until the sugarcane milling season in May 2025 is estimated at around 900,000-1 million tons. Thus, there is a deficit in consumption sugar of around 57,483-157,483 tons.

But keep in mind, despite the different ownership, the national sugar stock is still in the sugar factory warehouses. The stock does not include sugar that has left the sugar factory warehouses.

"The sugar is now in the hands of line 1 (D1), D2, D3 distributors, and retailers whose numbers have never been recorded or counted by the government," he said.

There are several sugar factories in Indonesia that will start grinding sugar cane in March and April 2025.

In addition, Soemitro continued, there are several sugar factories in Indonesia that will start milling sugar cane in March and April 2025. The sugar factory in Medan will start milling sugar cane in mid-March 2025. Likewise, the sugar factory in Lampung will start producing sugar in mid-April 2025.

From several sugar factories, it is estimated that there will be an additional consumption sugar of around 50,000 tons. Meanwhile, the government still has a stock of consumption sugar managed by PT RNI of 63,267 tons.

"Therefore, we are confident that the national sugar stock is sufficient, so there is no need to import sugar. We are worried that importing sugar will actually cause the price of sugar for farmers to fall," he said.