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Jakarta Post

Import relaxations not enough to secure garlic supply: Business watchdog

  • Made Anthony Iswara

    The Jakarta Post

Jakarta   /   Fri, April 3, 2020   /   05:24 pm
Import relaxations not enough to secure garlic supply: Business watchdog A trader tends to his garlic at Kramat Jati Market in East Jakarta. (JP/Nurhayati)

The government's recently issued import policy has failed to ensure a steady supply of garlic as importers have been late to complete garlic imports, Business Competition Supervisory Commission (KPPU) commissioners have said.

KPPU commissioner Guntur Saragih said on Thursday that the Trade Ministry needed to evaluate its importers because garlic prices were currently high even though the government had rolled out import relaxations.

"Under current conditions, a mere relaxation is not enough. There needs to be an emphasis on industry players promptly completing their imports because what we need is stock availability," Guntur said in a teleconference.

Guntur's statement came after the Trade Ministry issued a policy that temporarily removed import permit letters and surveyor's reports for importers from March 19 to May 31. The ministry previously claimed that importers would no longer need import recommendations for horticulture products from the Agriculture Ministry, though the latter has since refuted the claim.

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Garlic and brown onion prices have spiked in the last three months as a result of an increasing shortage of the two commodities.

The average price of garlic nationwide was Rp 44,450 per kilogram on Thursday, nearly double the usual price of Rp 25,000 to Rp 30,000 per kg, according to the Information Center for Strategic Food Prices. The price has fallen since mid-February, when it was above Rp 50,000.

The average price of brown onion has also increased, with Vegetable and Fruit Importers and Exporters Association data showing that retail prices for the commodity leaped to Rp 170,000 per kg in March, a sharp increase from Rp 62,500 in February and Rp 35,500 in January.

The Trade Ministry had imported 11,000 tons of garlic as of March 19, a far cry from its 150,000-ton quota. It had yet to announce its latest figures for brown onion imports as of Friday.

Read also: Rising garlic price cannot be blamed on coronavirus: Business watchdog

Guntur said this was not the first time that imports lagged behind. Last year, the price of garlic spiked to more than Rp 80,000 per kg due to import recommendations not being issued until April 2019.

However, Guntur said his team's investigation had yet to ascertain whether importers were intentionally holding back imports, a move that could push up prices. He said the commission would act upon this if it found any indication of violations.

"If needed, the government could blacklist these naughty importers," he said.

While there is a possibility of importers holding back their supply, Australian National University's Indonesia Project economist and Center for Indonesian Policy Studies (CIPS) supervisory board member Arianto A. Patunru said on Friday that opening up to more imports was still the "most powerful weapon" to combat such importers.

"They are less incentivized [to hold back supply] as they are unable to sell them at a high price because they know that the goods are already present in the market," he said in a webinar.

In contrast to the KPPU, CIPS researcher Felippa Ann Amanta said during the webinar that the ministry's relaxation had succeeded in stabilizing garlic and brown onion prices. As such, she suggested that the government apply similar policies for sugar and beef since Indonesia relied on imports to fulfill domestic needs for the two commodities.