The All-Indonesia Market Traders Association (IKAPPI) observes that the price of sugar continues to rise and has currently reached the highest point in the last three years. Abdullah Mansuri, the General Chairperson of the Central Board of IKAPPI, states that the current sugar price has reached the highest level in the past three years. "The current sugar price has reached its peak in the last three to five years, usually around Rp 14,000 to Rp 15,000. Now, the sugar price is Rp 16,000 (per 1 kilogram) or even higher," said Abdullah when contacted by Kontan.co.id on Sunday (12/11/2023).

Abdullah explains that the decision to increase the reference purchasing price (HAP) does not correlate with the current sugar price. He mentions that as long as production remains low and sugar imports remain high, the price will continue to soar. "Whether there is an increase in HAP or not, if production is low and imports are high, the price will certainly be high," he clarifies. Currently, there has not been an increase in sugar demand in the market, and usually, demand rises in December. Abdullah also notes that the purchasing power of the community is not currently considered high.

"It's a bit challenging, with low production and high imports, and the high value of the dollar, it certainly affects sugar prices," he adds. The National Food Agency (Bapanas) has implemented a relaxation of consumer sugar prices to Rp 16,000 per kilogram, or Rp 17,000 per kilogram specifically in certain regions, such as Maluku, North Maluku, Papua, West Papua, Papuan Highlands, Central Papua, South Papua, Southwest Papua, and the Outermost, Remote, Underdeveloped, and Backward (3TP) regions.

I Gusti Ketut Astawa, Deputy Head of the Availability and Food Stabilization NFA Division, explains that the relaxation of consumer sugar prices is carried out to maintain supply stability and sugar prices within the country. "In response to the increase in sugar prices domestically and internationally, a cross-ministerial coordination meeting has been held to discuss reasonable sugar prices at the consumer level. Based on the results of this coordination, we urge all retail businesses to implement the specified price relaxation," he says.

The relaxation of consumer sugar prices applies to modern retail businesses such as APRINDO and HIPPINDO. They are advised to sell above the Reference Sales Price (HAP), taking into account the sugar price from producers or international prices, packaging costs, distribution costs, and other factors. "This relaxation is implemented because sugar prices are already above the HAP. This flexibility will be regularly evaluated until sugar prices return to a reasonable level," adds Ketut. It is known that due to El Nino, sugar production is expected to decrease from the initial estimate of 2.6 million tons to around 2.2 million to 2.3 million tons. Meanwhile, the realization of Raw Crystal Sugar (GKM) imports is only about 180,000 tons or approximately 22.61 percent, and White Crystal Sugar (GKP) imports are about 126,941 tons or 58.82 percent. The minimal import realization is also attributed to some companies that have import quotas for GKM but have not yet carried out the realization. This is mainly due to the high international sugar prices, making sales according to the HAP at the consumer level unattainable.