Indonesia may not import white sugar in 2012

Indonesia, Southeast Asia's largest sugar consumer, may not import white sugar in 2012, given that its year-end inventory is expected to reach more than 1 million tonnes, above a safe level of 800,000 tonnes, a senior industry official said on Tuesday.
"I don't think it's necessary. White sugar stocks will be more than 1 million tonnes at year-end. We still have stocks from last year's imports," Bambang Priyono, secretary at the Indonesian Sugar Council (DGI), told Reuters. A cut in imports from Indonesia could put downward pressure on London white sugar prices, which struck a lifetime high around $823 a tonne on Monday because of uncertainty over the size of Brazil's centre-south cane crop.
Earlier this year, Jakarta issued a permit to import a total of 450,000 tonnes of white sugar for household consumption before the start of the crushing season in May, but only about 147,000 tonnes were purchased, indicating ample supply. The Indonesian Sugar Council has pegged Indonesia's white sugar output at 2.7 million tonnes in 2011 versus 2.3 million tonnes last year, with domestic demand little changed at 4.6 million tonnes.
"If our production did reach 2.7 million tonnes this year, stocks at the end of the year will still be huge at more than 1 million tonnes. There's no need to import," said Priyono. The DGI said in May that Indonesia could reach self-sufficiency in 2014, but Priyono said the country could miss the target because of persistent land constraints.
"Everybody is ready. The problem is the land. If there's no land, where can you grow cane?" said Priyono, adding that farmers often gave up land whenever sugar prices dropped. "I don't think we will achieve the national target of self-sufficiency." Indonesia in the 1930s was the world's second-largest sugar exporter after Cuba. But ageing sugar mills, a vast network of smallholders and an influx of cheaper imported sugar put pressure on domestic output. Indonesia has set aside 25,000 hectares for sugarcane plantations in the Merauke food estate in the remote Papua province, well below a target of 350,000 hectares.