Bulog to quit wheat business in October<\/p>\n
JAKARTA (JP): The State Logistics Agency (Bulog) will stop
\nimporting wheat and wheat flour in October after the government
\nends subsidies to the commodities, the agency's chairman said.<\/p>\n
Beddu Amang said that thereafter the private sector alone
\nwould import wheat while the agency concentrated on importing
\nrice and sugar.<\/p>\n
He said the agency would not lobby the government to prolong
\nthe subsidy, which according to reforms agreed with the
\nInternational Monetary Funds (IMF) should come to an end in
\nOctober.<\/p>\n
\"In October we will leave the wheat business and private
\ncompanies will have to take over our job,\" he said.<\/p>\n
Beddu said that private companies were already allowed to
\nimport wheat and wheat flour directly but added they had so far
\nbeen reluctant to do so.<\/p>\n
Private wheat flour producer PT Bogasari Flour Mills said that
\nit has no plans to import wheat directly, despite the removal of
\nimport restrictions on the commodity.<\/p>\n
Company director Franky Welirang argued that importing wheat
\nwould be too expensive because of the sharp depreciation in the
\nvalue of the rupiah.<\/p>\n
He said Bogasari would continue to operate exclusively as a
\nmiller.<\/p>\n
\"Milling Bulog's wheat is still more profitable than becoming
\na trader, even though the processing fee is very low,\" Franky
\nsaid.<\/p>\n
Franky said that Bogasari meets 80 percent of the country's
\nmonthly flour demand of 250,000 tons.<\/p>\n
Beddu said that Bulog planned to buy 700,000 tons of wheat
\nnext month.<\/p>\n
\"We will need to import around 4.25 million tons of wheat in
\nthis fiscal year. We have already bought approximately 1 million
\ntons,\" Beddu said.<\/p>\n
\"In September we will tender a contract to buy 700,000 tons of
\nwheat to cover between two and three months consumption,\" he
\nsaid. He declined to reveal the current stock of wheat flour held
\nby the agency.<\/p>\n
Beddu said the last wheat purchase tender was held on July 30,
\nwhen the agency bought 745,000 tons of wheat from the United
\nStates, Canada and Australia to cover August, September and
\nOctober. Prices agreed were between $129.24 and $171.00 per ton
\non a cost-and-freight basis.<\/p>\n
The agency raised the price of flour by 46 percent on Monday,
\nfrom Rp 2,231 per kilogram to Rp 3,290 per kg, to adjust for the
\nincrease in international wheat flour prices and the sharp
\ndepreciation in the value of the rupiah against the U.S dollar.<\/p>\n
Bulog lost its monopoly to import and distribute wheat, wheat
\nflour, soybeans, garlic and sugar on Feb. 1 under the economic
\nreform package agreed with the IMF.<\/p>\n
But under June's supplementary memorandum, all subsidies were
\nextended in an attempt to lessen the impact of the worsening
\neconomic conditions on the nation's poor. The agency's role in
\nimporting and distributing the commodities was also reinstated.
\n(gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bulog-to-quit-wheat-business-in-october-1447893297",
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