Flour producers seek exclusive import rights

Flour producers seek exclusive import rights

JAKARTA (JP): Local flour producers called on the government
on Thursday to give them sole import rights in order to stay
afloat amidst stiffer competition from abroad, Antara reported.

Bustanil Arifin, president of PT Sriboga Ratu Raya Flour
Mills, said such exclusive rights should be given unless the
government agreed to producers' demand for a 30 percent import
duty to stem dumping practices.

The rights could be given to small producers who have been
hurt by the unfair competition from imports, Bustanil, a former
chairman of the State Logistics Agency (Bulog), said.

"We cannot compete against cheap imports, and we cannot repay
our bank loans," he said.

Sriboga, based in Semarang, Central Java, is one of three
small flour producers in the country with an annual capacity of
400,000 tons. The other two are PT Panganmas Inti Persada Flour
Mills in Cilacap, Central Java (300,000 tons) and PT Berdikari
Sari Utama Flour Mills in Makassar, South Sulawesi (400,000
tons). The local wheat flour industry is dominated by PT ISM
Bogasari with an annual capacity of 3.6 million tons from its two
mills in Jakarta and Surabaya, East Java.

The four producers last week called on the government to
impose a countervailing duty against imports from France,
Germany, Belgium, Australia and the United Arab Emirates.

The national anti-dumping committee is currently looking into
the allegations and is expected to make a ruling in three months.

Bustanil was pessimistic that the government would agree to
the duty proposal because the International Monetary Fund (IMF)
had already rejected it, according to Antara.

"Small producers could close down and the IMF does not care,"
he said.

Indonesian flour mills rely on imported wheat, mostly from
Australia, Canada and the United States.

Bulog lost its monopoly right to import wheat, along with the
elimination of state subsidies in 1998. The government also
slashed import duty on flour to zero.

The market liberalization since then has led to rising flour
imports and declining wheat imports.

Wheat imports declined to 3.4 million tons in 1998 from 3.6
million tons in 1997 and 4.1 million in 1996. Flour imports rose
to 24,000 tons in 1998 from 15,200 tons in 1997. (10)