Market operations ordered to ensure adequate stocks

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)