Hoarders blamed for soaring rice price

Hoarders blamed for soaring rice price

JAKARTA (JP): Minister of Cooperatives, Small and Medium
Enterprises Adi Sasono has singled out profiteering big traders
as to blame for skyrocketing rice prices.

Speaking to journalists following a monthly meeting of
economic ministers on Monday, the minister accused the traders of
hoarding the staple to jack up prices.

He said the government's target to maintain the rice price at
Rp 2,000 per kg should have been attainable because domestic
supply was more than enough to meet demand, especially after the
arrival of a large volume of imports during recent months.

"If we have abundant supply while the market is short of
stocks, what do you think has happened."

Prices have risen to as high as Rp 4,000 (about 35 U.S. cents)
per kg in Jakarta and the country's major cities over the last
few days, well above the government's reference price of between
Rp 1,750 and Rp 2,000 per kg for low-quality rice.

Adi also suspected the commodity had been smuggled to Malaysia
because of the wide price disparity between the countries.

The government has increased rice imports for the year to 4.1
million metric tons, from an original plan of 3.6 million tons,
to meet the domestic deficit. About 3.5 million tons have arrived
at various ports in the country.

The government has also allocated Rp 15.71 trillion for the
State Logistics Agency (Bulog) in the current fiscal year to fund
rice price stabilization.

Adi said the government would encourage cooperatives to be
more active in rice distribution to counter hoarding by big
traders.

"Cooperatives will improve competition in the rice market."

He added the government would also force rice distributors to
periodically announce their stocks to allow the public to monitor
availability.

"Non-governmental organizations and universities are also
invited to independently monitor the country's rice procurement
system."

Minister of Trade and Industry Rahardi Ramelan said Monday he
had ordered Bulog offices throughout the country to continue
market operations to lower the price of rice.

He dismissed allegations the price rise was caused by Bulog's
failure to fulfill its task.

"When you look at the statistics, the very high price occurred
in the middle of August because of rumors of renewed mass
rioting."

Widespread rumors circulating last month said riots on a scale
of the May unrest would occur on or around Independence Day on
Aug. 17. They proved groundless.

Inflation high

High rice prices were considered one of the largest
contributors to the high August inflation rate.

Chairman of the Central Bureau of Statistics (BPS), Sugito
Suwito, announced on Monday that the inflation rate in August
remained high at 6.30 percent.

Sugito said the August inflation rate brought the figure for
the January to August period to 69.12 percent, compared to 4.97
percent in same period last year.

Inflation in the first five months of the current fiscal year
which began in April was 30.05 percent.

"The inflation rate in August was the second highest since
April after July's 8.56 percent," he told reporters.

He said the increase in the prices of food staples contributed
2.45 percent to the August inflation rate, processed foods and
cigarettes accounted for 1.50 percent, housing 0.99 percent,
clothing 0.27 percent. health 0.29 percent, education, recreation
and sports 0.49 percent and transportation and communications
0.31 percent.

Sugito predicted that cumulative inflation for the year would
not exceed 80 percent, even though several economists and
analysts have projected it could reach 100 percent.

He said exports from January to June this year fell 3.93
percent to $24.55 billion from $25.56 billion over the same
period last year.

Non-oil and gas exports increased to $20.60 billion from
$19.56 billion in the same period last year, while oil and gas
exports fell to $3.95 billion from $6 billion.

Total imports declined by 37 percent to $13.27 billion from
$21.39 billion.

Oil and gas imports slid 28.30 percent to $11.45 billion from
$2.02 billion. (aly/rei)