Councilor seek price ceiling for milk

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)