Indonesia will not issue more sugar import permits

Indonesia will not issue any additional import permits for raw or white sugar in 2011 because of ample supply, the trade minister said on Thursday, dashing hopes of more purchases by Southeast Asia's largest consumer. Earlier this year, Jakarta issued a permit to import a total 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 sufficient stocks.
"We have enough stock for white sugar at over 625,000 tonnes on July 15, while we have a plenty of sugar cane to be crushed nowadays," Trade Minister Mari Pangestu told Reuters. "Our white sugar production is still going on until November or December," she said. "So, until the end of this year there will be no additional sugar import permit." In May, Indonesia's trade ministry said the country had issued import permits for 224,200 tonnes of raw sugar until November for millers to fill in idle capacity during the crushing season.
Last month, the country's agriculture minister said Indonesia may still import white sugar in 2012 to cover shortages, adding the country's sugar sufficiency drive was being hurt by land scarcity. But physical dealers said Indonesia's interest had been slow even ahead of the current Ramadan fasting month, when demand for sweetener normally increases.
London October white sugar on Liffe fell $17.70, or 2.3 percent, to close at $752.30 per tonne - off a lifetime high at $890.1 in mid-July. New York raw sugar futures finished at a one-month low on Wednesday. Asia is awash with sugar due to bumper harvests in Thailand, India and the Philippines and the lack of buying support from Indonesia would add to pressure on prices. But while raw sugar from the Philippines struggled to find buyers, the drop in London whites futures spurred buying of Thai sweetener, dealers said.
Also in July, the Indonesian Sugar Council (DGI) said the country may not import white sugar next year, given that its year-end inventory is expected to reach more than 1 million tonnes, above a safe level of 800,000 tonnes. The DGI says the country's white sugar production this year was expected to reach 2.58 million tonnes, below a previous target of 2.7 million tonnes due to erratic weather. But the output forecast is still above last year's 2.3 million tonnes.
Prolonged rains in Java island, which supplies 60 percent of Indonesia's sugar output, delayed the domestic crushing season from May to June last year, and reduced the sugar content in cane, resulting in lower production. Indonesia was once the world's second-largest sugar exporter after Cuba in the 1930s.