Bungaran proposes ban on clove imports

The Jakarta Post, Jakarta

Minister of Agriculture Bungaran Saragih has proposed imposing a ban on the import of cloves by cigarette companies in a bid to help improve the sagging prices of the commodity at home.

He said on Thursday that measures must be immediately taken as local clove farmers had suffered huge losses during the recent July-August harvest as the price of the commodity had plunged to around Rp 15,000 per kilogram, which was equal to production costs.

"This (problem) has been reported to the President so that it can be resolved because farmers would get nothing with the current prices," he told reporters after meeting with President Megawati Soekarnoputri.

The Ministry of Trade and Industry has issued a license for cigarette makers to import cloves to secure a regular supply of raw materials.

Bungaran said, however, that the import ban proposal was just one alternative as the reason for the price decline could also be due to the fact that the buyers of cloves at home were only a few cigarette companies, which could dictate prices.

"A decision must be taken jointly by related parties," he said, pointing to the Ministry of Trade and Industry, Ministry of Finance, and the cigarette industry.

He acknowledged that cigarette companies had been under pressure to minimize production costs by seeking cheaper raw materials as they have been forced to contribute a greater amount of excise revenue for the cash-strapped government.

Indonesia is the largest importer of cloves from major producers like Zanzibar and Tanzania. The price of the commodity from these two areas is around US$1.5 (around Rp 12,600) per kilogram.