Indonesia Expected to See Sugar Deficit in 2016
Indonesia is forced to import sugar as domestic production of white crystal sugar in 2015 failed to achieve the target of 2.7 million tons. Indonesia's sugar processing plants only managed to produce 2.5 million tons of white crystal sugar in 2015. The Indonesian Sugar Association (AGI) predicts a widening sugar deficit in 2016 as it sees domestic production slowing further to 2.3 million tons in 2016, implying that about 400,000 tons of sugar need to be imported in order to meet domestic demand.
The AGI requests the Indonesian government to issue permits for the import of 400,000 tons of crude sugar in 2016. These imports will then be processed into white crystal sugar in the country's sugar processing plants.
The expected weak sugar production in Indonesia in 2016 is the result of drier-than-usual weather caused by the El Nino weather phenomenon, and will most likely disturb the country's sugarcane harvests in mid-2016. Sugarcane that was planted last year have been showing signs of weak growth due to stress (caused by the lack of water).
Sugarcane productivity in Indonesia is expected to fall from 67.6 ton per hectare to 66 ton per hectare. Although the size of Indonesia's sugarcane plantations grew from 446,000 hectares to 451,000 hectares it will not manage to make up for declining productivity per hectare, hence causing the deficit and need for imports from abroad.
Indonesia's white crystal sugar demand in 2016 is expected to reach 2.82 million tons, outpacing domestic production. The AGI says the deficit will be felt from February onward, unless the government allows crude sugar imports.
Currently there are 62 sugar factories in operation in Indonesia with an average installed production capacity of 4,000 tons per day. Since 2010 crude sugar imports into Indonesia have only been made for industrial uses.
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