Councilor seek price ceiling for milk

JAKARTA (JP): City councilors called on the government on Thursday to establish a price ceiling for milk to ensure that it was always available to the public at an affordable price.

Djafar Badjeber, head of Commission B for economic affairs, said the price of milk must be put under government control because it had been included in the group of basic food commodities.

Djafar said milk was officially placed in the group by the Minister of Trade and Industry decree no. 115/MPP/KEP/2/1998, dated Feb. 27.

"The government must therefore establish a price ceiling for milk like it has for other items in the group," he said.

The group of basic food commodities, which was established decades ago, includes rice, sugar, salt, salted-fish, detergent, cooking oil, kerosene, mori (unbleached plain cloth used to make batik), and synthetic clothing materials.

Agus Asmanuddin of the Golkar faction supported Djafar's suggestion, saying that a government backed price mechanism would prevent producers and retailers from fixing prices beyond the reach of customers.

He asked local producers to reduce the retail prices of milk when the rupiah strengthens against the U.S. dollar.

"Milk producers must react to the change by reducing retail prices," he said.

"Producers must be fair to the public when setting retail prices. Don't make excuses and say that the production cost is unbearable because of the weakness of the rupiah or that you have no choice but to increase retail prices," said Agus, who is also a member of Commission B.

Djafar said the commission discussed fluctuations in the price of milk at a meeting on Thursday. Representatives of the Indonesian milk manufacturing industry were present at the meeting.

"The industry increased prices by 25 percent and 95 percent in January and February respectively. They do not plan further increases. If prices have to be raised again, then it will be far too much," Djafar said.

The industry has tried to follow government instructions to cut retail prices by up to 20 percent from March, he said.

Producers have struggled to keep prices from rising exorbitantly as a result of a plunge in the value of the rupiah against the U.S. dollar which increased the relative cost of imported raw materials used in the production process.

"Our milk industry relied heavily on imported raw materials. Over 75 percent of production inputs were imported. Even materials used in canning and packaging were imported," Djafar said.

The industry predicts milk consumption will fall by 30 percent as a direct result of the economic situation.

Indonesia's average annual consumption of milk in recent years has been approximately seven kilograms per person. In Jakarta up to 25 kilograms per person per year were consumed on average.

The prices of other basic commodities have also risen this month.

The Market Information Center overseen by the Ministry of Trade and Industry recorded a subsequent surge in the retail price of sugar and flour in traditional markets and supermarkets in Jakarta. Sugar prices rose by 48.72 percent and flour prices rose by 20.69 percent in the first week of this month. An increased of up to 1.51 percent in the price of rice was recorded around the same time, the center's data showed. (cst)