Sugar trade must be improved: KPPU

Sugar trade must be improved: KPPU

The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) has
urged the government to revise quickly the regulations on sugar
trading as the existing ones have the potential to create unfair
competition and trigger the formation of a cartel.

KPPU member Sutrisna Iwantono said on Monday that Regulation
No. 643/MPP/Kep/9/2002 issued by the Ministry of Industry and
Trade could create unfair competition as it provided
opportunities only for particular business players.

"The mechanism on the importation and distribution of sugar --
whether raw, refined or plantation white sugar -- in the
regulation could produce an entry barrier for potential players,"
Sutrisna said.

Sutrisna added that as an alternative to the current sugar
policy, the agency had proposed in January three options to curb
sugar imports and help local producers.

First, the government could impose import duty on the
commodity in accordance with World Trade Organization (WTO)
regulations.

Second, the government could establish a quota for imported
sugar in order to afford protection to sugarcane farmers and to
provide balance in the domestic sugar industry.

Third, the amount and allocation of the quota should be
arrived at transparently, such as through an auction.

However, said Sutrisna, the government had not responded to
the agency's proposal.

The government increased import duties on raw and white sugar
earlier this month. The new tariffs are set at Rp 550 (0.6 US
cents) per kilogram for raw sugar (up from Rp 500) and Rp 700 per
kg for white and double-refined sugar (up from Rp 600).

Currently, only state-owned plantation firms PPTN IX, PTPN X
and PTPN XI, and state-owned trading firms PT Rajawali Nusantara
Indonesia and PT Perusahaan Perdagangan Indonesia are licensed to
import sugar.

Recently, the House of Representatives urged the government to
revise the regulations on sugar trading following an importation
scandal involving about 70,000 tons of smuggled sugar.