Govt will set up trade consortium for white pepper
Govt will set up trade consortium for white pepper
Adianto P. Simamora, The Jakarta Post, Jakarta
Despite rising criticism from the Association of Indonesian
Pepper Exporters (AIPE), the Ministry of Trade and Industry said
that it would go ahead with a plan to set up a consortium that
would regulate the trade of white pepper.
The planned consortium would purchase the commodity from
farmers during the harvest and consolidate the stocks to help
stabilize the price of the commodity, said director general for
foreign trade affairs Sudar SA.
He added that the consortium would also help protect the
interest of local farmers who had suffered from maneuvers made by
international traders who have been pushing down the price of the
commodity.
"We need a consortium on white pepper to help prop up the
sagging price (of the commodity) and boost farmer's bargaining
position against the foreign traders particularly from Europe,"
Sudar said.
The price of white and black pepper has been decreasing over
past several years. The price of white pepper, for instance, is
now only worth about Rp 22,000 (around US$2.40) per kilogram,
compared to around Rp 80,000 in 1998.
Sudar said that the decline in the price was mainly due to the
move by European traders who released their massive stocks during
harvest season in Indonesia.
"If the price continues to decline, our farmers will be forced
to change to another crop," said Sudar.
Indonesia is the world's largest white pepper producer,
accounting for between 70 percent and 80 percent of the world's
supply.
Indonesia exports pepper to Europe and the U.S.
The country's white pepper, labeled in the international
market as Muntok White Pepper, is mostly produced on the island
of Bangka Belitung. Muntok is the name of the seaport in Bangka.
The main harvest of white and black pepper in Indonesia
normally starts around June-July.
AIPE on Wednesday called on the government to abort its plan
to set up the consortium, arguing the move would further hurt the
country's weakening exports.
The association said that the establishment of the consortium
would allow other countries to grab a greater share in the
international market, diminishing Indonesia's portion.
In 1986, the government formed a marketing body for white
pepper called the Indonesian Pepper Marketing Body, which
functioned for several years to market the commodity in the
overseas markets.
The government later formed two sole agents for European and
the U.S. markets, but these were closed down after protest from
the association that the agencies were acting as monopolies
limiting the number of exporters.
Sudar ensured that the planned consortium would not create
monopoly in exports.
"We will involve exporters, local government and state
enterprises in the consortium," said Sudar.
He said that the funding for the consortium would be provided
by the three parties.