Bulog to import 6,000 tons of olein from Malaysia

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)