Academic journal article Researchers World

Examining of Production, Consumption, Imports and the Effect on Sugar Self-Sufficiency

Academic journal article Researchers World

Examining of Production, Consumption, Imports and the Effect on Sugar Self-Sufficiency

Article excerpt

INTRODUCTION:

Sugar is one of the important food commodities after rice in Indonesia. Sugar consumption is getting higher every year. The consumption increase is not proportionate to domestic production. Granulated sugar is a food source of calories which ranks fourth after cereals, animal food and oil and grease, with a market share of 6.7%. Sugar is also one of the main sweetening agents and has been used extensively, both for household cons umption and as raw material for the food industry (Sugiyanto, 2007). Consumers are more and more sugar in line with population growth and industrial growth in the food and soft drinks.

The development of the industrial sector will stimulate economic growth in order to offset population growth. At the same time, the growth of the industry to create new jobs, boost gross domestic product and per capita income. On the other hand, the growth of the industry can reduce the volume of imports. National sugar requirement currently reaches 5.7 million tons. The sugar requirement consists of 2.8 million tons of white sugar (GKP) for direct public consumption and 2.9 million tons of refined sugar crystals (GKR) to m eet the needs of the industry. The sugar demand will continue to increase as population growth, the development of food and beverage industry, hotels, restaurants and others (Ministry of Industry of the Republic of Indonesia, 2016). The level of sugar consumption in Indonesia exceeded the level of production, to meet the national sugar stock, then do import. The realization of the production, consumption and imports are presented in the following table providing information regarding opportunities to improve national sugar production as a substitute to sugar imports over the years.

Growth of average consumption of the period 2001-2015 amounted to 4, 86% with an average consumption volume of 4,236,814 Tons. On the other hand, production actually only increased by 3.89% with a production rate of 2,261,328 Tons. This phenomenon resulted in increased imports to meet domestic consumption amounted to 16, 64% with the average volume of 2,009,739 Tons. The fact is clear that there is a deficit, or the difference between the needs of domestic consumption with production of sugar.

Over the span of the last eight years, consumption of sugar increased by 8.54% with an average volume of 4,952,767. On the other hand, does not follow the consumption of sugar production. That the only production growth of 0.42% with an average of 2,533,869 tons. The deficit amounted to 31.65% or 241,889,816 Tons. The results indicate the existence of a deficit of investment opportunities to increase production capacity of sugar factories. Deficit figure that exceeds the ability of domestic production led to increased imports of sugar in an attempt to meet the needs of domestic consumption. The sugar factory in Indonesia based distribution, 48 factories located on the island of Java and the remaining 15 are outside Java, especially in Sumatra.

Most of the sugar factory is old, there's even older than 100 years. Thus, the national sugar factory productivity is very low, until 2016 only 63 pieces of the plant are still in operation. Problems faced at the national self - sufficiency is: (1) The sugar factory which there are mostly old and low productivity, (2) The area for the development of the sugar cane crop has been limited, primarily in Java; and (3) Provision of raw materials supplied mostly by sugar cane plantations sugarcane and sugarcane fields at times transformed to enable to plant more profitable crops (Indonesia Sugar Annual Report, 2016).

LITERATURE REVIEW:

The type of Sugar in the trade:

Based on the type, sugar traded are: (a) Plantation White Sugar (GKP); (b) raw sugar (GKM); and (c) of refined sugar (GKR) (Decree of the Minister of Industry and Trade No. 61/ MPP/Kep./2/2004). Plantation White Sugar is sugar that has been processed and can be directly consumed by households. …

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