Jakarta, Aug 7 - Indonesia has set a ceiling price for white sugar sold by local cane millers at 6,500 rupiah (66 U.S. cents) a kg to prevent soaring local prices, the trade minister said on Friday.
Local sugar prices hit record high of 8,655 rupiah per kg this week despite rising stocks as crushing gained pace, as sugar millers factored in record global prices into their selling price, a trade ministry official said.
London October white sugar <LSUV9> had hit a record high of over $500 a tonne on Monday after a recent rally, before extending gains further.
"The limit has been effective since August 3 and it has been passed down to local sugar traders," Trade Minister Mari Pangestu told reporters.
On Monday, Indonesian state firm PT Perkebunan Nusantara XI sold 12,820 tonnes of white sugar at auction at 7,104 rupiah per kg or about 10 percent higher than in the previous auction.
With a ceiling price at 6,500 rupiah a kg, prices of sweetener in the local market would range between 7,300-7,500 rupiah per kg, Subagyo, director general of domestic trade at the ministry, said.
"It's an anomaly that sugar prices in the retail market are going up in the peak of crushing just because global prices went up. Also, we aren't importing white sugar," he said.
"All players agree on bringing sugar prices down to normal level."
Indonesia, traditionally one of Asia's biggest buyers of the sweetener, is scaling back imports of white sugar for household consumption since domestic output now exceeds consumption.
Southeast Asia's biggest economy, however, still relies on imported raw sugar to produce high quality refined sugar used by the food and beverage industry.
Domestic food and beverage firms normally import white sugar, or buy high-quality refined sugar from refiners which only use imported raw sugar as a raw material.