More world market access called for

More world market access called for

JAKARTA (JP): An official said yesterday that more and more
Indonesian agricultural commodities should enter the world
market, irrespective of their prices, as market access is
becoming the key in international commodities trading.

"Even though the prices of our commodities are decreasing on
the world market, better market access will be our strength,"
Paian Nainggolan, director of the trade research center at the
Ministry of Trade, said at a seminar on quality improvement of
plantation crops here yesterday.

Paian contended that commodity prices on the international
market are tending to decline over time, not only because output
was increasing, but also because the number of producers was
increasing.

He said Indonesia's commodity producers and traders should be
well-prepared to enter global competition by penetrating new
markets and offering competitive prices.

"We cannot avoid competition. And when competition is gets
tougher, it simply means our margin is shrinking," he said. "We
have to accept it. Otherwise, we will be beaten by our
competitors."

He noted that the government currently still protects certain
agricultural products from foreign competition by applying high
tariffs and import restrictions.

Indonesia's commitment to the World Trade Organization (WTO),
which overseas global reductions of tariff and non-tariff
barriers, includes the lowering of tariffs on 1,341 agricultural
products.

Of the committed agricultural products, the import tariffs on
1,014 items are set at 40 percent, 300 items at more than 40
percent and only 27 items at less than 40 percent.

"However, sooner or later we have to increase our commitments
on agricultural products to the WTO," Paian said, adding that the
purpose of the WTO was to make agricultural products accessible
to as many people possible.

Echoing Paian's suggestion on enlarging market access, Rachmat
Soebiapradja of the Agro-Industry Research and Development Center
said that Indonesia's commodity producers and traders should pay
closer attention to international demand for better quality.

"By improving the quality of our exported commodities, we can
improve our country's image as well as enlarge our market
access," Rachmat said.

He noted that currently Indonesia has a bad reputation
regarding cocoa exports to the United States. "As a result, it
imposes an automatic retention on our cocoa," he said.

Meanwhile, according to the Indonesian Cocoa Association,
Indonesia is projected to be the world's second largest cocoa
producer for the 1995/1996.

The world's annual production of cocoa is now estimated at 2.4
million tons, with Indonesia producing 280,000 tons.

Last year, Indonesia's exports to the United States
encountered 676 cases of detention, worth US$226.71 million,
almost 12 times the value of detentions in 1988. Of the total
number of cases, 456 concerned plantation crops, such as cocoa,
coffee and latex.

The most common reason for detention of Indonesia's products
by the U.S. Food and Drug Administration was insect filth and
other contamination.

The Minister of Trade's Decree No. 22/Kp/II/1995 requires all
commodity producers and exporters to abide by quality
certification requirements set by the National Standardization
Council. The decree allows a one-year period, ending next
January, for commodity producers and exporters to make the
necessary adjustments to the requirements.

"Such requirements should not be seen as barriers but as
stimuli to improve the quality of our commodities so that they
will be able to compete better on the world market," said
Rachmat, who is a former director general of plantations. (rid)