REPUBLIKA.CO.ID, JAKARTA -- The trade ministry said it is seeking to prevent illegal supply of double refined sugar to the open market for household consumption.

The government has issued a policy to prevent double refined sugar, which is used only for industry, to enter the market of sugar for household consumption, Ardiansyah S Parman, a special staff of the trade minister, said.

"Distributor will no longer be used in the supply of double refined sugar to reduce the possibility of the industrial sugar supplied to the market of sugar for household consumption," Ardiansyah S Parman said here on Sunday.

Toward the end of last year, the trade minister revoked a circular of the trade minister No 111/M-DAG/2/2009 on distribution of double refined crystal sugar and replaced it with a circular No 1.300/M-DAG/SD/12/2014 on distribution instruction for double refined sugar.

With the new regulation effective as from January 2015, double refined sugar has to be supplied directly to the users mainly food and beverage manufacturers based on their contracts.

The regulation is expected to put an end to illegal supply of double refined sugar to the market of sugar for household consumption.

Distributors have been suspected of being responsible for the illegal distribution of double refined sugar to the open market.

Ardiansyah said an estimated 200,000 tons in 2014 or 15-20 percent of supply of double refined sugar in the country went illegally to the open market.

As a result, by the end of 2014 there was a stock of 1.4 million tons of sugar, which is feared to disrupt stability in the market sugar for the consumption of households and small industries.

The hardest hit is sugar farmers as the price of their sugarcane would decline to below the official price set by the government.

The government has sought to prevent illegal supply of double refined sugar to the open market , not only by stopping the service of distributors , but also by tightening import license for raw sugar as feedstock for double refined sugar, Ardiansyah said.

The trade ministry has issued license for the import of 672,000 tons of raw sugar in the first quarter and 945,643 tons in the second quarter of this year.

The country depends on import for raw sugar to feed its double refined sugar industry to produce sugar for food and beverage industry.

Imports of raw sugar is set to meet demand from the food and beverage industry, Ardiansyah said.

Imports, therefore, is based on recommendation from the industry ministry, as demand for industrial sugar could surge ahead of religious day celebrations, he added.

With the tightened control of raw sugar imports and the stoppage of the use of distributors in supply of double refined sugar, illegal supply of industrial sugar to the open market could be stopped or reduced, he said.

This year the country's total requirement of household and industrial sugar would reached 2.8 million tons.

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