Bogasari discounts importing wheat<\/p>\n
JAKARTA (JP): PT Bogasari Flour Mills has no plan to directly
\nimport wheat despite the removal of the import restriction on the
\ncommodity, its director said here yesterday.<\/p>\n
Franky Welirang argued that importing the wheat grain would be
\ntoo expensive for the company given the sharp fluctuation of the
\nrupiah.<\/p>\n
In addition, the distribution system of wheat flour, which was
\npreviously controlled by the State Logistics Agency (Bulog),
\nremained unclear, discouraging newcomers to enter the retail
\nbusiness of the commodity.<\/p>\n
He said Bogasari would operate only as a miller for the time
\nbeing.<\/p>\n
Franky noted that domestic trading of wheat flour had not been
\nwholly deregulated yet even though the government had allowed
\nprivate companies to import and distribute wheat and wheat flour
\nsince February.<\/p>\n
All wheat flour production and processed wheat still has to be
\nsold to Bulog, he said.<\/p>\n
\"Milling others wheat is still more profitable than becoming a
\ntrader although the processing fee is very low,\" Franky told
\nAntara news agency.<\/p>\n
He said the processing fee in milling wheat into wheat flour
\nwas currently set at Rp 83.7 per kilogram (0.56 U.S cents). It
\nwould be raised to 1 U.S cent if domestic trading was wholly
\nfreed.<\/p>\n
Before Feb. 1, Bulog held a monopoly on the import of wheat
\nand wheat flour, and distribute them to its appointed
\ndistributors. PT Bogasari Flour Mills has held the exclusive
\nrights to mill Bulog's wheat into flour since the late 1960s.<\/p>\n
Bulog lost its monopoly to import and distribute wheat, wheat
\nflour, soybeans, garlic and sugar from Feb. 1 under the economic
\nreform package agreed to with the International Monetary Fund.<\/p>\n
Welirang said that Bogasari meets 80 percent of the country's
\nmonthly flour demand of about 250,000 tons. The balance is
\nsupplied by PT Berdikari, Danimitra group, Indorama Nusantara and
\nCitra Lamtoro Gung, which is owned by former president Soeharto's
\neldest daughter Siti Hardijanti Rukmana.<\/p>\n
Indonesia relies on imported wheat and wheat flour to meet
\ndemand. Bulog said the agency would import 4.25 million tons of
\nwheat flour this year to meet the domestic demand.<\/p>\n
Welirang said few private firms had asked for the government's
\nsubsidy to import wheat and wheat flour, which is set at Rp 6,000
\nper U.S dollar, due to the unclear procedures in obtaining the
\nsubsidy.<\/p>\n
Bulog's chairman Beddu Amang said Tuesday the government would
\ncontinue to subsidize wheat flour until April 1 next year,
\ninstead of lifting the subsidy on Oct. 1 as previously planned.<\/p>\n
\"The wheat flour price should be set at Rp 4,000 considering
\nthe continued fall in the rupiah value. But since the government
\nhas decided to subsidize Rp 1,800 per kilogram, we can sell it at
\nRp 2,200. By extending it, we can raise the price gradually.\"<\/p>\n
He added that Bulog's wheat flour stocks currently stood at
\n325,000 tons.<\/p>\n
Bulog raised the price of flour 86 percent on July 1 to around
\nRp 2,231 per kilogram from Rp 1,200, to adjust the increase in
\ninternational wheat flour prices and the sharp depreciation in
\nrupiah's value against the U.S dollar, which had caused the cost
\nof imported wheat and wheat flour to more than triple.<\/p>\n
Under the International Monetary Fund's economic reform
\npackage for Indonesia in January, it was agreed that all food
\nsubsidies would be lifted by Oct 1. But under last month's
\nsupplementary memorandum, all subsidies were extended in an
\nattempt to lessen the impact of the worsening economic conditions
\non the nation's poor.<\/p>\n
The IMF and the government predicted that the total subsidy
\nbill would run at 6 percent of the country's gross domestic
\nproduct. The extension of the subsidies, in part, has led to a
\nprojected 8.5 percent deficit in the country's 1998\/99 budget.
\n(gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bogasari-discounts-importing-wheat-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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