It quoted Bulog chairman Beddu Amang as saying 50 per cent of the imported sugar would be white sugar while the rest would be raw.

"We can reduce our costs by importing raw sugar since it is less expensive than white sugar," Amang was quoted as saying. He said the agency would only import low-quality white sugar in order to keep expenses down.

"Importing raw low-quality white sugar could save us between $30-$50 per tonne," he said.

The imported sugar would be processed by sugar mills in the country, the newspaper said.

Indonesia said last week it bought 30,000 tonnes of raw sugar and 202,000 tonnes of white sugar in a tender for shipment in August and September.

Bulog says it will tender for another 500,000 tonnes on August 11.

Amang said Bulog's sugar stocks had been depleted after theagency reduced its purchases of sugar from local mills following the government's decision to liberalise the domestic sugar trade two months ago.

Under the new policy, private and state sugar mills are allowed to sell 25 per cent of their output directly to the market, while the remaining 75 per cent must be sold to Bulog, said the paper.

Previously, the mills were obliged to sell 100 percent of their output to Bulog, which would distribute the sugar to the market.