When Rice Runs Out, Sugar Appears

The story of the government's food reserves has entered a new chapter. After strengthening the rice reserves, the government is now reinforcing the sugar reserves. State-owned enterprises in the food sector are becoming the spearhead of this initiative.

As of July 7, 2025, the government's rice reserves (CBP) at Perum Bulog have reached 4.2 million tons. To realize this, the government is strengthening Bulog's capital with funds amounting to Rp 16.5 trillion through the government investment operator (OIP) mechanism.

With such a significant amount of CBP, the government can intervene in the market at any time when there is an increase in rice prices. For instance, in mid-2025. The rise in rice prices occurs at a time when national rice production and CBP are abundant.

To mitigate the rise in rice prices, the government has launched two programs. First, the government will gradually flood the market with 1.318 million tons of rice through the Food Supply and Price Stabilization Program (SPHP).

Secondly, the government has begun distributing rice assistance to 18.3 million low-income families. Each family will receive 20 kilograms (kg) of rice for two months at once, namely June and July 2025.

Amid efforts to curb the rising price of rice, the price of sugar is creeping up. According to data from the National Food Agency (Bapanas) as of July 9, 2025, the national average price of consumer sugar at the consumer level is Rp 18,337 per kg. This sugar price is 4.78 percent above the government-set reference selling price (HAP) of sugar at the consumer level, which is Rp 17,500 per kg.

Unlike rice, the government's sugar reserves (CGP) are not substantial. As of July 1, 2025, the CGP amounts to only 46,000 tons. The CGP is managed by Bulog and ID Food, with 6,000 tons and 40,000 tons respectively.

The CGP is too little to dampen the rise in sugar prices. This is considering the national consumption demand for sugar, which amounts to 230,000-250,000 per month.

Therefore, the government is striving to strengthen the CGP while also improving the welfare of farmers. The Head of Bapanas, Arief Prasetyo Adi, introduced this plan during the National Sugar Partnership Forum 2025 in Jakarta on July 2, 2025.

Referring to the Consumption Sugar Balance Projection prepared by Bapanas, Arief stated that the peak of the sugarcane milling season or sugar production in 2025 is expected to occur in July and August. The potential consumption sugar production in July 2025 is estimated to be 602,200 tons, and in August 2025, it is projected to be 615,400 tons.

Then in September 2025, sugar production is expected to decrease to 500,800 tons. Therefore, private sector players and state-owned food enterprises are expected to absorb farmers' sugar at a minimum price of Rp 14,500 per kg.

"Specifically for state-owned food companies, farmers' sugar absorption is needed for CGP. Funding is currently being prepared, amounting to Rp 1.5 trillion," he said.

In the Food Outlook June 2025 Edition, the Food and Agriculture Organization (FAO) estimates that Indonesia's sugar production in 2025 will reach 2.6 million tons. This sugar production in Indonesia still falls significantly short of Thailand's, which is 10 million tons. However, Indonesia still surpasses the Philippines and Vietnam, whose sugar productions are 1.8 million tons and 1.1 million tons, respectively.

Meanwhile, the Ministry of Agriculture estimates that national sugar production in 2025 will reach 2.9 million tons. This production estimate is higher than the actual sugar production in 2024 and 2023, which were 2.46 million tons and 2.27 million tons, respectively.

To support the national sugar needs, the government has expedited the achievement of self-sufficiency in consumption sugar from 2028 to 2026. The government is also accelerating the target for achieving self-sufficiency in industrial sugar from 2030 to 2027, or at the latest, 2028.

Minister of Agriculture Andi Amran Sulaiman stated that, in fact, the Ministry of Agriculture has a National Sugar Self-Sufficiency Roadmap. In this roadmap, national self-sufficiency in sugar consumption is targeted to be achieved by 2028, while self-sufficiency in industrial sugar and bioethanol is aimed for 2030.

"However, President Prabowo Subianto requested that the target for self-sufficiency in consumption sugar be accelerated to next year (2026). Furthermore, by 2027, at the latest 2028, the target for self-sufficiency in industrial sugar is also expected to be achieved," he stated in a press release on Tuesday (8/7/2025).

To that end, the government will roll out a number of strategies. First, the Ministry of Agriculture will rejuvenate approximately 500,000 hectares of farmers' sugarcane through the Bongkar Ratun program.

President Prabowo Subianto has requested that the target for self-sufficiency in sugar consumption be accelerated to next year (2026). Furthermore, by 2027, at the latest by 2028, the target for self-sufficiency in industrial sugar is also expected to be achieved.

The Ministry of Agriculture notes that in 2024, Indonesia has 796,621 sugarcane farmers managing 520,823 hectares of sugarcane. Of the total land area, 83.5 percent of the sugarcane fields are located in Java. The majority of these sugarcane plants have not been rejuvenated for a long time.

"The dismantling of the ratoon sugarcane will be carried out gradually over three years. With this ratoon dismantling, sugarcane production can increase by up to 15.5 million tons per hectare. The minimum sugarcane yield can also increase from 7.29 percent to 7.65 percent," said Amran.

Secondly, the government, through state-owned enterprises, has launched a new scheme for People's Business Credit (KUR) for sugarcane farmers. Through this new scheme, farmers can apply for KUR amounting to Rp 500 million without the need for accumulated loans. Previously, after the loans accumulated to Rp 500 million, farmers had to switch to commercial loans.

The KUR can be applied for by individual farmers or farmer groups with a purchase commitment from state-owned sugar mills, including SugarCo or PT Sinergi Gula Nusantara (SGN). The interest rate for the KUR is 6 percent.

Thirdly, the Ministry of Agriculture, along with relevant stakeholders, will also develop superior sugarcane varieties. On June 16, 2025, for instance, the Directorate General of Plantations and the Plantation Crop Variety Assessment Team of the Ministry of Agriculture released two superior sugarcane varieties, namely SGN 01 and Panjalu 01.

SGN 01 is a sugarcane variety developed and proposed by PT SGN. Meanwhile, Panjalu 01 was produced and proposed by the Kediri Regency Government in collaboration with the National Research and Innovation Agency (BRIN) and the Surabaya Agricultural Seed and Plant Protection Center (BBPPTP).

The SGN 01 variety can serve as an alternative to mid-late maturing varieties with high productivity potential. The productivity potential of this sugarcane variety reaches 120 tons per hectare with a yield of over 10 percent.

Meanwhile, the Panjalu 01 variety serves as an alternative variety with slow maturity that has high productivity. The productivity potential of this variety is claimed to be 20 percent higher than the productivity of most sugarcane plants currently.

The Director of Annual and Perennial Crops at the Ministry of Agriculture, Baginda Siagian, stated that superior varieties of sugarcane need to be continuously developed to achieve the target of self-sufficiency in sugar. To date, there have been 117 superior sugarcane varieties released by the Ministry of Agriculture, but their adoption among farmers remains low.

"Farmers are fond of using the Bululawang (BL) variety. The productivity of this sugarcane is 70 tons per hectare with an average yield of 7 percent. To achieve the target of self-sufficiency in sugar, at least superior sugarcane varieties with productivity above 100 tons and an average yield of 8 percent are needed," he said.

The Ministry of Agriculture notes that the national sugar requirement is 8.1 million tons per year. This sugar demand consists of 3.4 million tons for consumption and 4.7 million tons for industry. With an average national sugar production of 2.5 million tons, Indonesia must cover its shortfall of approximately 5.6 million tons through imports.

To achieve the target of self-sufficiency in sugar consumption by 2026, Indonesia must at least increase sugar production by a minimum of 900,000 tons. Furthermore, to meet the target for both consumption and industrial sugar by 2028 at the latest, Indonesia needs to add a minimum of 5.6 million tons of sugar production. Let us await its realization.