Sugar Lobby Group Welcomes Indonesia's Announcement to Lower Export Tariffs

Sugarcane harvest.

Sydney, 30 Jumadil Awwal 1438/27 February 2017 (MINA) – The sugar lobby group Canegrowers says a joint announcement by Australia and Indonesia to reduce import tariffs will improve competitiveness.

The rate will drop to about 5 per cent for Australian sugar, down from its current level of 12.5 per cent.

In 2015 the Indonesian Government decided to give Thailand’s sugar exporters a tariff of 5 per cent, while the tariff for Australia remained at about 12 per cent, effectively making Thai sugar cheaper to import by $30 per tonne.

Canegrowers chairman Paul Schembri was quoted by abc.net.au as saying that in the past two years the higher tariff had seen exports into Indonesia fall from 1 million tonnes per annum to just 200,000 tonnes.

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He said the drop in volume had caused a $400 million “headache”.

“We now hope that by this announcement to put us on a par with Thailand in terms of a 5 per cent tariff, that we will be competitive again and we can rebuild that tonnage into one of our most important markets,” Mr Schembri said.

“We have had lost sales opportunities into Indonesia.

“We have obviously been selling that sugar. It has been displaced out of Indonesia into other markets, but in the competitive export game — and we are highly exposed to exports — we need to sell to as many markets as possible.

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“The simple mathematics is that this could result in a saving to the Australian industry of around $30 million dollars, provided we can retrace our steps and get back to that 1 million tonnes annual access.”

Rebuilding export volumes will take time

However, there is a lot of ground to make up in order to grow the current export volumes to Indonesia back to 1 million tonnes, but Mr Schembri remained positive.

“We hope that our relationship with the Indonesians has been a sound one, particularly through our marketing companies, we have maintained with the Indonesian refiners,” he said.

“We hope that we can obviously reinstate that tonnage and we believe that our relationships are still sound.”

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As well as being a benefit to Australian cane growers, Mr Schembri said such an increase in export volumes and revenue would have a flow-on effect for the wider community.

“The sugar industry is part of the economic and social backbone of communities such as Mackay,” he said.

“We need to export our production to as many markets as possible [and] Indonesia is a valuable market to the Australian sugar industry.

“It now restores, hopefully, the importance of that market and will hopefully improve the financial viability of the industry at large.”

The industry is hopeful the new tariff could be implemented later this year. T/RS05/RS01)

Mi’raj Islamic News Agency (MINA)