Govt cooking oil policy criticized<\/p>\n
JAKARTA (JP): The current uncertainty in cooking oil prices is
\nthe result of misdirected government market interventions and has
\nnot been caused by the poor distribution system for the
\ncommodity, a senior agriculture analyst has said.<\/p>\n
Bungaran Saragih, an economist from Bogor Institute of
\nAgriculture, said yesterday that government intervention in the
\ndomestic and export markets for crude palm oil (CPO), which is
\nused to manufacture cooking oil, has caused great uncertainty in
\nthe industry.<\/p>\n
\"Government intervention has distorted the cooking oil market
\nand caused price and supply uncertainty,\" he told The Jakarta
\nPost.<\/p>\n
Cooking oil prices in the country increased sharply in early
\nJanuary as a result of a scarcity which came about when the
\nrupiah fell in value against the U.S. dollar, thereby providing
\ndomestic producers with an opportunity to make large profits
\nthrough the export of CPO and its derivatives.<\/p>\n
To counter this phenomenon the government imposed a 40 export
\ntax on CPO and its derivatives in April, which was subsequently
\nraised to 60 percent. However this has failed to discourage
\nexports and the price of cooking oil has remained high. It is
\ncurrently hovering at between Rp 5,000 and Rp 6,000 per kilogram,
\ndespite a government reference price of Rp 4,000 per kilogram.<\/p>\n
The government has also on a number of occasions attempted to
\nalter the commodity's cumbersome distribution system to attain a
\nmore reliable supply, but this too has failed to have the desired
\nimpact on domestic market prices.<\/p>\n
Bungaran said the way to stabilize cooking oil prices was to
\nend government market interventions and allow prices to be
\ndetermined by the market.<\/p>\n
\"It might make domestic cooking oil prices even more expensive
\nbut the government would not have to spend money subsidizing
\ncooking oil sales,\" he said.<\/p>\n
Customers would then have to decide whether to continue
\nconsuming cooking oil or seek other alternatives, he added.<\/p>\n
\"Cooking oil should be excluded from the list of essential
\ncommodities because people do not die without it. They can use
\nother edible oils as a substitute or they can prepare their food
\nby boiling it or steaming it,\" Bungaran said.<\/p>\n
Bungaran defended private CPO producers who have been
\nexporting their produce.<\/p>\n
\"The companies are only doing business, they want to export.
\nThe government's intervention in the cooking oil market helps
\nconsumers, but it is killing CPO producers\" he said.<\/p>\n
Traders said that cooking oil was selling for between Rp 5,100
\nand Rp 5,200 per kilogram in Jakarta yesterday. (gis)<\/p>",
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"sponsor_url": "https:\/\/okusiassociates.com"
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