Private sector not ready to begin importing wheat

JAKARTA (JP): The State Logistics Agency (Bulog) said yesterday that it would still import wheat after government subsidies to the commodity are lifted in October.

Bulog's spokesman Masjkur Sulaiman said the agency would continue to import wheat because private companies would not be ready to take over the task within the next three months.

"Bulog's involvement in wheat procurement will depend on the private sector's readiness to take over the job," Masjkur told The Jakarta Post. The agency's imports are essential to ensure price stability, he added.

Last week, Bulog chairman Beddu Amang said the agency would stop importing wheat and wheat flour in October after the government ended subsidies to the commodities.

He said thereafter the private sector alone would import wheat, leaving the agency to concentrate on importing rice and sugar.

He pledged the agency would not lobby the government to prolong the subsidies, which according to the program of reform agreed to with the IMF should come to an end in October.

Beddu said that private companies were already allowed to import wheat and wheat flour directly but added they had so far been reluctant to do so.

He said the agency would import 4.25 million tons of wheat in the 1998/1999 fiscal year.

Bulog lost its monopoly to import and distribute wheat, wheat flour, soybeans, garlic and sugar in February under the terms of the IMF reform agreement.

But the supplementary memorandum signed in June restored the agency's import and distribution role and extended subsidies on all of the commodities in an attempt to lessen the impact of the economic crisis on the nation's poor. (gis)