CPO producers to assist Bulog in market operation<\/p>\n
JAKARTA (JP): The National Logistics Agency (Bulog) has
\nannounced that starting from the middle of next month, all crude
\npalm oil (CPO) producers in the country are required to allocate
\npart of their production for its market operations.<\/p>\n
Bulog's chief, Beddu Amang, said the decision was made during
\na joint meeting on Friday between the agency, the Ministry of
\nAgriculture, the Ministry of Industry and the Federation of
\nEdible Oil and Fats Association, Antara reported over the
\nweekend.<\/p>\n
The move is expected to gradually cut back local cooking oil
\nprices by Rp 100 (4.46 U.S. cents) to bring the price down to Rp
\n1,410 per kilo by September from the current range of Rp 1,547
\nand Rp 1,600.<\/p>\n
He said the market operations are also expected to cut large-
\nscale vendors out of the distribution line, bringing products
\ndirectly from producers to small-scale vendors and retailers.<\/p>\n
Beddu said the market operations will involve a buffer stock
\nof 75,000 tons of CPO, which is expected to come from
\ninstallments made by state-owned and private palm oil
\nplantations.<\/p>\n
Bulog, which was set up to manage the distribution of basic
\nfood commodities and maintain their prices at reasonable levels
\nthrough market operations, was unable to prevent cooking oil
\nprices from soaring earlier this year.<\/p>\n
The prices escalated last year despite the agency's market
\ninterventions and a raise in CPO export taxes, which were meant
\nto stabilize domestic prices, encourage investment in palm oil
\nplantations and protect local producers of cooking oils.<\/p>\n
Indonesia plans to boost palm oil production to seven million
\ntons by the year 2000 at its plantations which have grown from an
\narea of 405,646 hectares in 1983 to 1.6 million hectares by the
\nend of last year.<\/p>\n
Exemption<\/p>\n
Beddu Amang said that private companies providing CPO for
\nnucleus estate and small-holder projects will be exempted from
\nhaving to allocate part of their production for the agency's
\nbuffer stock.<\/p>\n
The policy will be applied to other private firms with the
\nsize of contribution based on the size of their plantations.<\/p>\n
Beddu Amang said that if the agency's market intervention
\nfails to stabilize prices, imports of CPO will be allowed, in
\nspite of their higher prices. World market prices are Rp 100 to
\nRp 200 per kilo higher than the domestic market price.<\/p>\n
Cooking oil from Malaysia currently costs about Rp 1,687 per
\nkilo, he said.<\/p>\n
The agency usually allows imports during peak demand in the
\nIdul Fitri and New Year holiday seasons. Imports reached 96,000
\ntons in 1992 and increased the next year to 112,000 tons, but
\ndropped to 109,000 tons in 1994.<\/p>\n
He estimated that Indonesia's CPO production will reach four
\nmillion tons this year, of which 2.5 million tons are for
\ndomestic consumption.<\/p>\n
Indonesia's CPO exports increased from 683,000 tons in 1990 to
\n1.2 million tons in 1993, but declined by about 55 percent to
\n773,000 tons last year. Cooking oil exports rose from 45,000 tons
\nto 69,000 tons before slightly declining to 65,000 tons in the
\nsame period.<\/p>\n
Responding to questions about the World Bank's analysis that
\nBulog had escalated the country's food prices to make them higher
\nthan world prices, Beddu said that unlike the actions of private
\nsector monopolies, which seek profits, Bulog's monopolistic
\npractices are aimed \"for the benefit of the people\".<\/p>\n
He said that higher prices on the domestic market were needed
\nto protect farmers.<\/p>\n
If that protection was eliminated, he said, farmers would not
\nfeel encouraged to produce optimally. Among the commodities which
\nstill need protection are soybeans, he said.<\/p>\n
Earlier last week members of the House of Representatives
\nexpressed concern over the low prices that farmers received from
\nBulog for their rice compared to the price offered by private
\nvendors.<\/p>\n
They said that several farmers received only Rp 657 (30 U.S.
\ncents) from Bulog, far lower than the Rp 750 offered by private
\nvendors. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cpo-producers-to-assist-bulog-in-market-operation-1447893297",
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"sponsor": "Okusi Associates",
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