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Jakarta Post

Govt strengthens prevention of commodity price fixing

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Mon, November 16, 2015   /  05:33 pm

The government has reiterated its commitment to increasing market monitoring to manage prices of staple commodities, including beef and rice, by eradicating price-fixing practices.

Business Competition Supervisory Commission (KPPU) head Syarkawi Rauf said President Joko '€œJokowi'€ Widodo had asked the commission to focus on the monitoring of beef and rice.

Syarkawi said the commission had identified five to seven major players in national rice production in 11 provinces, including Central Java and North Sumatra, as the players could possibly dictate the price of rice in the market.

'€œWe will continue to monitor them. If they do anything that indicates anti-competitive practices, we will take necessary action,'€ Syarkawi told reporters late last week.

He further explained that with the limited number of players, it would be easy for price fixing to occur.

He said the commission would impose sanctions on unlawful players, if found guilty, ranging from administrative punishment to recommending that their permits be revoked.

The price and scarcity of rice as Indonesia'€™s main staple food has been a major concern this year following decreasing rice stocks owing to the prolonged season as a result of the El Niño weather phenomenon.

The government has been struggling to secure the country'€™s stocks, which continue to run low, partially through imports, as Vice President Jusuf Kalla confirmed that more than 1 million tons of rice from Thailand and Vietnam had begun entering Indonesian ports.

Kalla expressed concern for the possibility of inflated prices with the late harvest, and that the country needed to secure enough stocks to survive, with a vacuum to fill around 2.5 million tons.

Rice prices rose by more than 30 percent in February this year. The government attributed the abnormal price movement partially to the '€œrice mafia'€.

The government has appointed independent firm PT Sucofindo to audit at least 14,000 warehouses nationwide amid suspicion of illegal stockpiling and reselling.

Warehouse owners found guilty of illegal stockpiling could face up to five years'€™ imprisonment and fines of Rp 50 billion (US$3.70 million).

Jokowi previously insisted that stocks, though running low, remained adequate, as he aimed for the country to be self-sufficient in key commodities such as rice, corn, soybeans and sugar.

Meanwhile, Syarkawi also said that the commission had tried 32 feedlotters allegedly involved in cartel-like practices last month that contributed to soaring beef prices, which at one point rose to Rp 130,000 per kilogram from the usual Rp 90,000 after Idul Fitri.

He said the feedlotters were found to have reduced the supply of cattle to be slaughtered from 30 head of cattle daily to eight head of cattle, leading to scarcity.

'€œThis is where KPPU steps in to investigate the cartel-like practice on beef,'€ Syarkawi said.

Agriculture Minister Amran Sulaiman signed a memorandum of understanding (MoU) on Friday with the local governments of six provinces, including Jakarta, West Nusa Tenggara, East Java and South Sulawesi, through which the leaders agreed to cooperate in securing and monitoring the supply of staple commodities, including rice, beef and corn.

In its first phase, the MoU will focus on securing the supply of beef in Jakarta, which needed 60,000 head of cattle per month, according to Amran, from the other five provinces. The ministry would use the new livestock vessel recently officiated by the President to transport as many as 500 head of cattle to Jakarta, said Amran. (fsu)

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