Rini blames naughty distributors for skyrocketing sugar price hikes
The Jakarta Post, Jakarta
Minister of Industry and Trade Rini MS Soewandi admitted on Monday that the current hike in the price of sugar on the domestic market was mainly due to distribution problems.
But Rini said that she could not impose sanctions against the government-appointed distributors because of the absence of a trade law.
"This is our weakness. We can't impose sanctions against them (importers and distributors), because we don't have a trade law," Rini told reporters, but quickly added that she had talked with the National Police chief with a view to seeking alternative ways of punishing greedy distributors.
She did not provide any details, however.
Rini also said that her ministry was now drafting a law in a bid to improve the domestic trade system.
The price of domestic sugar has recently jumped to a record high of around Rp 6,000 (about 60 U.S. cents) per kilogram, compared to the government-set price of Rp 4,000 per kilogram.
Some suspected the price hike was linked to hoarding by distributors in a bid to prop up the price and reap bigger profits.
Others criticized Rini's policy, which drastically reduced the number of sugar importers to four state-owned companies from 800 private importers previously. The policy was adopted last year in a bid to control supplies here so as to protect the interests of local sugarcane farmers.
The latest hike in the price of sugar, however, has not benefited the farmers as the harvest will only start next month.
Elsewhere, Rini said that her office had issued a license for the importation of another 50,000 tons of sugar this year. Previously, the ministry has issued licenses for the importation of 650,000 tons of sugar. Only a limited amount of these imports have actually arrived here.
She said that import would no longer cause serious harm to local farmers as the registered importers were also required to purchase locally produced sugar during the harvest at a set price of Rp 3,100 per kilogram.
Indonesia is one of the world's largest sugar importers.