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Oligopoly leads to rice hoarding
An analyst has warned that Indonesiaâs rice market has long tended toward oligopoly, making it prone to hoarding that can lead to skyrocketing rice prices
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A
n analyst has warned that Indonesia's rice market has long tended toward oligopoly, making it prone to hoarding that can lead to skyrocketing rice prices.
IPMI International Business School economist Jimmy M. Rifai Gani said around five to eight large-scale traders operating in Indonesia's rice market were currently able to influence national rice prices.
'If these large-scale rice players engage in illegal cooperation and hold back the distribution of rice to consumers, the market will be automatically influenced,' he said in a statement made available to The Jakarta Post on Tuesday.
Jimmy said it appeared that the government did not yet need to import rice because stocks of the commodity at the State Logistics Agency Bulog were still adequate to stabilize rice prices in the market. Moreover, he said, rice imports would reduce prices for farmers and weaken the competitiveness of local rice.
The analyst went on to say that if the government had to import rice, the imported rice must be used only for certain needs and it should not be of a type not produced locally.
Earlier, Trade Minister Rachmat Gobel claimed that a rice mafia was responsible for a jump of up to 30 percent in rice prices in Jakarta.
He ordered Bulog president director to take the necessary measures to stabilize rice prices.
Recently, the price of rice at Cipinang market increased to Rp 12,000 (93 US cents) per kilogram while according to the Trade Ministry and Bulog's calculations, the rice should have been sold at Rp 7,400 per kilogram. (ebf)(+++)
