City to get auction market for basic goods
City to get auction market for basic goods
Damar Harsanto, Jakarta
In a bid to maintain supplies and prices of basic commodities
during peak seasons, the city administration and the Jakarta
Chamber of Commerce and Industry will establish an auction market
to link producers with potential buyers.
"Not only Jakarta, several other provinces will also have
similar auction markets that will be launched simultaneously by
President Megawati Soekarnoputri via a teleconference on Monday,"
chamber chairman Pungky Bambang Purwadi told a media briefing at
City Hall on Thursday.
Megawati is scheduled to be in Makassar, South Sulawesi, at
that time for an undisclosed purpose, said Pungky.
Pungky said the market would facilitate the auction in which
producers could negotiate directly with buyers.
Producers would include farmers, cooperatives and middlemen
who register with the auction market management, while buyers
would comprise traders, and consumers such as supermarkets,
hospitals, hotels, restaurants and wholesalers.
"This way, hopefully, we can protect farmers or producers from
middlemen who exploit them by buying their products at low prices
and selling them at high prices, and at the same time ensure a
stable supply of basic goods in the markets. Therefore, it would
stave off the widespread practice of price-fixing," said Pungky.
Price-fixing is commonplace during holidays -- such as the
fasting month, Idul Fitri, Christmas and New Year, when demand is
high, because producers or farmers are not aware of the market
situation, according to Pungky.
"At times, farmers simultaneously produce certain agricultural
products, which amount to an excess in supply that exceeds demand
and in turn causes market prices to plunge. At other times, they
do not produce the commodities that are in high demand, causing
the market prices to rise," he explained.
Through the auction market, the producers and buyers could
enter into a legally binding contract to produce certain products
of a fixed quality to trade at a particular time and at a fixed
price agreed to by both parties.
The market would also impose quality standards for the
auctioned products.
Aside from agricultural products, other items to be auctioned
are products from plantations, animal husbandry, fisheries,
forestry as well as processing industries.
The auction transaction would be guaranteed by city-owned Bank
DKI.
"For the time being, the chamber of commerce will not impose
any fees on the transactions. But, we plan to impose a maximum
fee of 1 percent of the transaction if the system runs well,"
Pungky added.