Jakarta, Aug 31 - Indonesia's food and beverage firms are currently facing a sugar shortage of around 200,000 tonnes amid slow deliveries from refiners, an industry official said on Monday.
"Many sugar-buying contracts have not been delivered," said Suroso Natakusumah, who chairs an association of food and beverage firms which consume sugar.
As a result, the food and beverage industry cannot operate normally, he said.
Indonesia's food and beverage industry relies on refined white sugar from eight sugar refiners which have a combined installed capacity of 2.178 million tonnes a year.
The refiners, in turn, rely entirely on imported raw sugar, which is tightly regulated. So far, the government has issued permits to the refiners to import 1.435 million tonnes of raw sugar in 2009.
The price of raw sugar soared to its highest level in almost 30 years on Friday, driven by investor concerns about tight supplies and strong global demand for the sweetener.
Meanwhile, benchmark London white sugar notched an all time-time high of $589.90 a tonne on Aug. 13. The sugar price rally has been driven by strong demand from top consumer India and weak global supply.
The price of white sugar for direct consumption in Indonesia has also surged to a fresh high in the past week, climbing above 11,000 rupiah ($1.09) per kg, tracking global price.
The price rally has led to concerns that the food and beverage industry may have also bought local white sugar, which by regulation can only be sold to consumers or used as a raw material by small-scale food and beverage industries. But Natakusumah denied that was the case.
He said to help the industry the government needs to issue more raw sugar import permits and relax the requirement for imports of white sugar.
The government is currently studying options to bring down the sugar price as consumption is set to rise ahead of Eid al-Fitr, a major festival in world's biggest Muslim country which marks the end of a month-long Ramadan fasting period.
The options include cutting the import duties on raw and white sugar, currently imposed at 790 rupiah ($0.792) per kg for imported white sugar and 550 rupiah per kg for imported raw sugar.
The government is also asking state plantations to sell sugar at lower prices to poor families.