Government to maintain trade restrictions
JAKARTA (JP): The government will continue to regulate the trade in a number of commodities to ensure continued marketing and price stability for the benefit of farmers, producers, traders and consumers, Minister of Trade Satrio B. Joedono said yesterday.
He told a meeting with the House of Representatives' Commission VII -- which is responsible for finance, trade, cooperatives and logistics -- that the trade regulation is aimed at balancing supply and demand.
"The commodities whose trading is still regulated include cloves, fertilizer and cement," said Joedono, adding that the regulations are not contradictory to the principles of the World Trade Organization.
He said the regulation of clove trading is aimed at improving farmers' welfare. At the same time, the government is encouraging clove farmers to diversify into other crops because clove prices are on the decline, he added.
"If, through clove farming diversification, clove supply and demand have not reached equilibrium by the year 2000, the trade regulation will be extended further," Joedono said.
He said that the regulation of fertilizer trading will also be extended until after the year 2000 because the supply of food, particularly rice, is essential for the stability of the country's economy.
The minister said that, even though cement prices are vulnerable to increases when demand rises drastically in the dry season, the government will also continue to regulate its trading domestically.
With approval from the government, the Indonesian cement producers' association determines the areas of distribution among its members, while the government sets local reference prices for cement.
"The current instability of cement prices will be able to be controlled in 1998, when the construction of new and expansionary projects has been completed," Joedono said.
By 1998, Indonesia's cement production plants, with a total production capacity of about 50 million tons per annum, will produce 43 million tons per annum, while the country's demand is projected to be 36.7 million tons per annum, he said.
He said that PT Semen Padang's annual production capacity will increase from 3.5 million tons at present to 5.8 million tons by 1998, PT Semen Baturaja's will rise from 500,000 tons to 1.2 million tons, PT Semen Cibinong's will rise from three million tons to 5.5 million tons, PT Indocement Tunggal Prakarsa's will rise from 9.5 million tons to 12.7 million tons, PT Semen Nusantara's will rise from 1.5 million tons to 4.1 million tons, PT Semen Gresik's will rise from 4.1 million tons to 8.7 million tons, PT Semen Tonasa's will rise from 1.18 million tons to 3.48 million tons and PT Semen Kupang's production capacity will rise from 530,000 tons to 650,000 tons.
Joedono also announced yesterday the establishment of several new cement producers: namely, PT Semen Gombong, with an annual production capacity of 1.5 million tons; PT Eraska Semen, with 600,000 tons; PT Indocodeco Cement, with 2.4 million tons; PT Balikpapan Daya, with 308,000 tons; PT Prodiso Semen Indonesia, with 1.5 million tons; and PT Maluku Dinamika Semen, with three million tons. (kod)