Rice, sugar and AFTA

Rice, sugar and AFTA

In a surprise move at the 10th AFTA board meeting in Jakarta
Wednesday, Indonesia asked to postpone lowering tariffs on rice
and sugar until Jan.1, 2020, to coincide with the APEC schedule.

From the point of view of our national trade interests, the
10-year postponement would provide a good incentive for
investment in the sector and for production of the two
commodities.

Apparently this move was in response to the government's
decision to allow investors in sugar refinery businesses outside
of Java to market a part of their own production without the help
of the State Logistics Agency (Bulog).

This measure reflects the government's resolve to gradually
reduce Bulog's monopoly so the private sector can eventually take
over the entire production and distribution of these strategic
commodities and compete in a free market.

Investing in agricultural estates, however, is not for those
who desire fast profit. In this particular sector, profits are to
be expected only after 10 to 15 years at the earliest.

-- Bisnis Indonesia, Jakarta