Market operations ordered to ensure adequate stocks

JAKARTA (JP): President Soeharto summoned three cabinet ministers yesterday and ordered them to ensure sufficient stocks of rice, cooking oil and other foodstuff in anticipation of Christmas, New Year and the Islamic fasting month Ramadhan.

The President ordered them to conduct massive market operations together with the National Logistics Agency (Bulog) to ensure the best possible procurement and distribution of the foodstuff at reasonable prices.

The measures are also needed to curb inflation which hit a record 1.65 percent last month, as rising food prices contributed 78.8 percent to the inflation rate.

"We have discussed this with the President and decided to take important measures by flooding the market (with huge supplies) so that their stocks and prices can be brought under control," Minister of Trade and Industry Tunky Ariwibowo said after meeting with Soeharto at the latter's residence on Jl. Cendana, in Central Jakarta.

During the meeting, Tunky was accompanied by Minister of Agriculture Sjarifudin Baharsjah and Minister/State Secretary Moerdiono.

Tunky said the government has decided to impose a quota on crude palm oil (CPO) exports to boost domestic supply and stabilize inflating prices.

"Seventy-five percent of our CPO and olein production is allocated for domestic consumption," Tunky said.

Sjarifuddin said state-owned oil palm plantations provide Bulog with 40,000 tons of olein per month, and therefore there was no reason to raise cooking oil prices.

"But it does not mean that we do not pay attention to other commodities like vegetables and chilies," Sjarifuddin said.

After inspecting two major rice depots last week, Soeharto gave his assurance that rice stocks will be more than enough.

According to the Central Bureau of Statistics (BPS), in November food prices rose 3.66 percent from October or 17.31 percent year-on-year, while housing prices increased 0.54 percent.

The sharp increase in food prices has pushed up the year-on- year inflation rate to 9.01 percent, much higher than the 5.9 percent in the same period last year.

"We will keep attempting to bring inflation under control so that it will not disturb the development process," Moerdiono said.

Moerdiono declined to comment when asked whether the government will likely import rice to stabilize prices in the near future.

"In our calculation, our production is enough and we want to maintain stock and price stability at reasonable prices," Moerdiono said.

Officials have said that this year's long drought, believed to be the worst in the last 50 years, would reduce the country's rice production from 51 million tons last year to 49.1 million tons.

State Minister of Food Ibrahim Hasan, however, said earlier this month that the government had allocated nearly Rp 1 trillion (US$281.7 million) to finance rice and sugar imports in anticipating rice scarcity around February next year.

"We have to import rice to maintain two million tons of rice stocks per month, because in Jakarta alone about 300,000 to 700,000 tons of rice are marketed per month," Ibrahim said. (prb)