Govt announces plan to liberalizes sugar trade<\/p>\n
JAKARTA (JP): The government announced yesterday it would
\nliberalize the domestic sugar trade and assigned the State
\nLogistics Agency (Bulog) to stabilize market prices.<\/p>\n
Minister of Trade and Industry Rahardi Ramelan, speaking after
\nthe Economic and Finance Resilience Council's meeting, said sugar
\nmills were now required to give farmers the sugar they are
\nentitled to -- 65 percent of sugar output -- rather than cash
\ncompensation as previously.<\/p>\n
Farmers would then be free to sell sugar in the market.<\/p>\n
The mills are also required to sell the remaining 35 percent
\nof the sugar output to Bulog, which distribute it to the market.<\/p>\n
The government sets the floor price of sugar at Rp 1,690 (12
\nU.S. cents) per kilogram -- the level the mills normally pay for
\nfarmers -- and the maximum selling price at Rp 2,500 a kilo.<\/p>\n
\"If sugar prices fall below Rp 1,690 a kilo, Bulog will buy
\nsugar directly from farmers at the floor price. But if the prices
\nshoot past the Rp 2,500 level, Bulog will conduct market
\noperations to bring the price to below that level,\" Rahardi said.<\/p>\n
\"So, we save the interests of both farmers and consumers. We
\nprotect farmers with the floor price and consumers with the
\nmaximum selling price.\"<\/p>\n
At present the country suffers a deficit of Rp 1.3 million
\ntons of sugar, Rahardi said.<\/p>\n
To anticipate scarcity of sugar in the domestic market, he
\nsaid Bulog would soon import raw materials to be processed by
\nsugar mills in the country.<\/p>\n
The minister also said that the government would continue to
\nensure the availability of cooking oil at affordable prices in
\nthe market by assigning Bulog to distribute cooking oil.<\/p>\n
Bulog would purchase cooking oil, not crude palm oil (CPO),
\ndirectly from state plantation firms (PTPNs).<\/p>\n
PTPNs are required to process their CPO at plants owned by
\nprivate firms, which would only get processing fees from PTPs.<\/p>\n
The Ministry of Trade and Industry will appoint the private
\nfirms to process the plantation companies' CPO.<\/p>\n
\"Bulog will purchase cooking oil from PTPNs and then
\ndistribute it through its networks and through cooperatives. This
\nis a new measure to ensure that there will be no more fighting in
\nthe market on who has the right to distribute cooking oil,\"
\nRahardi said.<\/p>\n
As the plantation firms' production would not be enough to
\nmeet domestic demand, Bulog would be assigned to buy cooking oil
\nor CPO from the free market through an auction system.<\/p>\n
\"Bulog's operation will end by the end of December 1998. After
\nthat, both cooking oil and sugar trade will be liberalized, and
\ncooperatives will be given a chance to purchase and distribute
\nthem,\" Rahardi said.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita noted that the government's decision to
\ngive Bulog a central role in both the cooking oil and sugar trade
\nshould not be interpreted as a backward move toward monopoly.<\/p>\n
\"Please, don't get the idea that we have returned to the
\nmonopoly because what Bulog will be doing is to stabilize prices.
\nPlease trust Bulog while we are preparing cooperatives to take
\nover its role in 1999.\"<\/p>\n
Rahardi also revealed that the government would introduce an
\nexport ban for subsidized commodities and their derivatives, but
\nhe did not specify what they were.<\/p>\n
Meanwhile, Bank Indonesia Governor Sjahril Sabirin said the
\ncentral bank would maintain the current free foreign exchange
\narrangement, arguing that it served the country best for long-
\nterm period.<\/p>\n
\"We want to have a high quality foreign exchange management
\nand a high quality rupiah. And we can achieve that only by
\nmaintaining our free foreign exchange regime.\" (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-announces-plan-to-liberalizes-sugar-trade-1447893297",
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