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)