Indonesia’s sugar market is characterized by strongly growing consumption, static local production and consequent rising imports, making the nation a major raw sugar importer. At the same time, the local sugar industry is reliant on smallholder growers and a milling sector dominated by state-run units constructed during the Dutch colonial period, which has been unable so far to boost production levels. Its plantation (high colour) white sugar production is reserved for local direct consumption (known as the wet market). The government has long harbored the ambition to be self-sufficient in sugar. Indonesia’s President, in November 2022, announced a plan to become self-sufficient in sugar by 2030. Each previous attempt at sugar self-sufficiency has fallen short. This time, the self-sufficiency ambition would be met by expanding cane area under state-run sugar mills from 180,000ha to 700,000ha, not just in the traditional sugar heartland of Java, but also in other regions and islands. The plan has been entrusted to the state-owned plantation firm PT Perkebunan Nusantara X (PTPN X) and state-owned sugar miller PT Sinergi Gula Nusantara (PT SGN). This study delves into the key characteristics and drivers of Indonesia’s sugar industry and market, highlighting key issues and challenges. Projections of local consumption, production and imports are developed using a scenario approach. A key conclusion is that self-sufficiency is very much a moving target with consumption of sugar set to continue growing, while a significant boost to local sugar production can only be achieved with a combination of area expansion, productivity gains via high yielding varieties, improved agronomic management and post-harvest technology, as well as significant investment to improve sugar mill efficiency and sugar yields.

Contents:

Introduction									

Part 1: Indonesia’s Sugar Industry						
	(1) Overview								
	(2) Canegrowing								
	(i) Sugarcane Growing Areas						
	(ii) Cane and Sugar Yields							
	(iii) Cane Payment 								
	(3) Sugar Milling Sector							
	(i) Millers									
	(ii) Sugar Production							
	(iii) Cane Quality and Factory Efficiency					
	(4) Domestic Sugar Price						
	(5) Refiners								
	(6) High Fructose Corn Syrup						
	(7) Domestic Markets							
	(8) Imports									
	(i) Import Quotas								
	(ii) Import Dynamics and Major Origins				

Part 2: Diversification and Value Adding	 			
	(1) Ethanol								
	(i) Fuel Ethanol							
	(ii) Non FGE								
	(2) Cogeneration (biomass Power)				

Part 3: Current Market Situation					

Part 4: Outlook to 2030 (2030/31)					
     (1) Revitalisation of National Sugar Industry			
     (2) Consumption Outlook						
     (3) Production Outlook and Scenarios				
          (i) Key Issues								
          (ii) Production Growth Scenarios						
       Scenario 1: increasing area under cane					
       Scenario 2: Yield Increase							
       Scenario 3: Cane Area Expansion & Yield Increase			
     (4) Self Sufficiency and Imports Outlook 				

Conclusions