Bulog to import 6,000 tons of olein from Malaysia
JAKARTA (JP): The National Logistics Agency (Bulog), the government's semi buffer stock agency for certain food products, will import 6,000 tons of olein from Malaysia in preparation for a possible shortage of the cooking oil raw material.
Bulog Chairman Beddu Amang said yesterday that the importation would be carried out because of uncertainty about the olein supply from local crude palm oil (CPO) producers for his agency.
"The importation of the olein will be the last resort in stabilizing the prices of cooking oil on the domestic market," he told journalists after installing the heads of Bulog's offices in East Timor, West Kalimantan and Maluku.
The government has recently imposed taxes on CPO exports as part of its strategy to stabilize cooking oil prices on the domestic market.
Bulog will procure 75,000 tons of olein within three months, beginning this month. Approximately 20,000 tons of olein will be procured this month, 25,000 tons in August and the remaining 30,000 tons in September.
Beddu said Kantor Pemasaran Bersama, the joint marketing agency for state-owned plantation firms, and privately-managed CPO companies were expected to supply the targeted reserves.
10 producers
Bulog has assigned to 10 major CPO producers the task of coordinating the olein procurement: Sinar Mas, Salim Plantation, Sucofindo, Raja Garuda Mas, Tolam Tiga Indonesia, Lonsum Indonesia, Astra, Duta Permai, Indecda and the Tarmidzi Rangkuti Group.
Beddu said that the olein procurement in July had not run as smoothly as expected because most of the assigned private CPO companies did not deliver the product.
CPO producers are often reluctant to sell olein, the most important CPO product, to local markets because of its higher price on overseas markets.
Beddu said that he would meet with the assigned olein suppliers on Monday to further discuss the participation of private CPO companies in strengthening Bulog's olein buffer stock.
In the planned meeting, he and executives of the assigned companies would discuss the pricing of olein for the planned reserves and the allocation of olein to be supplied by each private CPO producer, he said.
Beddu said that the price of olein to be supplied to Bulog would be adjusted to the prevailing price in Java.
Sanctions
He said that the assignment of private CPO producers to supply olein to Bulog was an appeal and that the assignment was given only to those CPO plantations with at least 10,000 hectares.
"That's why we haven't talked about sanctions. It is an appeal and we want them to participate," he said when he was asked about the government's response to the bumpy supply of olein to his agency.
Beddu ruled out the possibility of launching open market measures to halt a further rise in cooking oil prices.
"We hope cooking oil prices will decline without market intervention," he said.
Beddu said that cooking oil prices, which are now approximately Rp 1,550 (70.4 U.S. cents) per kilogram, would fall by at least another Rp 25 per kilogram in each of the following months, meaning a price level of Rp 1,400 per kilogram before the beginning of the Moslem fasting month in late January.(hen)