Bulog accused of hoarding sugar to reap profit
Bulog accused of hoarding sugar to reap profit
The Jakarta Post, Jakarta
The National Economic Recovery Committee (KPEN) on Tuesday
accused the State Logistics Agency (Bulog), the main distributor
of imported sugar, of hoarding the commodity in a bid to prop up
the price to gain profit.
KPEN chairman Sofyan Wanandi said the move had created
scarcity in the market, which led to the current hike in sugar
prices.
"Bulog is not serious in distributing sugar to the markets.
They hold the sugar in their warehouses so as to gain more
profit," Sofyan told The Jakarta Post.
He said that Bulog also increased the price of the commodity
before selling to its distributor network.
Bulog chairman Widjanarko Puspoyo could not be reached for
comment.
Sugar prices have recently increased from the government-set
price of Rp 4,000 (45 U.S. cents) per kilogram to around Rp
6,000.
Bulog has a mandate to stabilize the price of sugar at home by
distributing imported sugar.
Minister of Industry and Trade Rini M. Soewandi last year
issued a decree, which only allows a limited number of companies,
mainly state-owned plantation companies, to import sugar in a bid
to avoid oversupply in the domestic market and help protect the
interests of local sugarcane farmers.
The imported sugar will go to Bulog warehouses.
Rini has also allowed Bulog to import 100,000 tons of sugar
this year.
There has also been criticism that Rini's move to limit sugar
imports by state plantation firms contributed to the sugar price
hike problem.
Elsewhere, Sofyan also urged Rini to revoke her trade regime
policy on sugar.
He said that a more effective way to protect the interests of
local sugarcane farmers was through imposing an import tariff
system: raising the tariff at harvest time and lowering it when
supplies at home were low.
He said the tariff system should not lead to excessive price
hikes of the commodity.
"Imposing a high import tariff is the right solution if the
government wants to seriously help the local sugarcane farmers,"
Sofyan said.
Sugarcane farmers have long pressured the government to boost
import tariffs as high as 110 percent, which is still in line
with World Trade Organization (WTO) rulings.
But Rini has argued that high import tariffs would hurt local
consumers and manufacturers that used sugar as a raw material in
their production processes.
Today, the government imposes import tariffs of Rp 700 per
kilogram on white sugar.
Indonesia, the world's second largest importer of sugar,
applies the lowest import tariffs on the commodity.