Govt to set reference price for white pepper

Govt to set reference price for white pepper

Adianto P. Simamora
The Jakarta Post
Jakarta

The Ministry of Industry and Trade will set a base price for
white pepper in a bid to help stabilize the current dwindling
price of the commodity on the domestic market, a senior official
said on Friday.

"Minister Rini M. Soewandi will issue a new degree regulating
the price of white pepper before June," Ferry Yahya, director of
agricultural and mining exports at the ministry, told reporters
after a meeting with the Association of Indonesian Pepper
Exporters (AIPE).

The base price is the price to be used by exporters and a
government-sponsored consortium when purchasing pepper from
farmers.

The price of white pepper has been decreasing over the past
several years. It now only fetches about Rp 22,000 (around
US$2.40) per kilogram compared to about Rp 80,000 in 1998.

The government blamed the price decline mainly on the
strategies being applied by European traders, who had been
releasing their massive stocks during harvest time in Indonesia.

Ferry said that the ministry would also immediately set up a
consortium for the white pepper trade, whose main task would be
to purchase the commodity from farmers during the harvest season
and consolidate local stocks.

"We are in the final stages of the talks (on the planned
consortium). Some 80 percent of pepper exporters have agreed to
the plan," Ferry said.

Earlier, AIPE called on the government to abort the plan to
set up the consortium as it would only further hurt the country's
weakening exports.

Indonesia is the world's largest white pepper producer,
accounting for between 70 percent and 80 percent of the world
supply. Indonesia exports the commodity to Europe and the U.S.

The country's white pepper, labeled on the international
market as Muntok White Pepper, is mostly produced on the islands
of Bangka Belitung. Muntok is the name of a seaport in Bangka.

The main pepper harvest in Indonesia normally starts around
June-July.

AIPE predicted that the country's pepper exports would decline
to about 40,000 tons this year from last year's figure of about
45,000 tons due to a decrease in output.