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Rabu, 08 Juni 2016

Food Trade: Police to Investigate Market Anomalies



The government has acknowledged there are anomalies in the food commodities' trade as indicated by peculiar price increases in recent weeks. The supply of various commodities has been increased, but prices keep rising. Therefore, the government has asked the police to investigate the food supply chain.



Agriculture Minister Andi Amran Sulaiman, told Kompas in Jakarta, Tuesday (7/6/2016), there were anomalies in the trade of food commodities. Total supply of various commodities had exceeded demand, but prices remained high.

He said in June the supply of cooking oil reached as much as 1.8 million tons with an estimated demand of 455,000 tons. The supply of chicken totaled 256,000 tons with an estimated demand of just 112,000 tons. Chicken eggs supplies were at 261,000 tons, while its demand was only 131,000 tons.

"Although the supply already exceeds the need, prices keep rising. It indicates there are market anomalies. The president has asked the head of the National Police to investigate the supply chain," he said.

The minister also said that the president had given directives to the Agriculture Minister, Trade Minister, director of the Bureau of Logistics (Bulog) to take the necessary measures in stabilizing food commodity prices.

Particularly for meat, the government is closely monitoring sales in the market and has increased beef supplies with imports to keep prices down.

Commenting on increasing beef prices, the president said it was occurring because there was a gap between demand and supply. It was also because of the late delivery of imported beef to Jakarta. The President asked the people to wait for its arrival. "We'll see, it's already on its way [beef imports]. It will be a day, two days or three days, then please see [the effect on prices]," the president said.

The president also promised to check the price of beef in the market. "When the price has reached the level we want, I am going to the market," the president added.
Overly long supply chain

Separately, the chairman of the National Economic and Industrial Committee, Soetrisno Bachir, said the government should shorten the long supply chain of commodities, especially in the beef trade.

Trade Minister Thomas Lembong said the government was working on the planning of production, importation, and distribution of beef. "Related to beef, the problems occur in planning. The vice president has reminded us all, the ministers, to stick to the plan," Lembong said.

Meanwhile, Home Affairs Minister Tjahjo Kumolo has asked all regional heads to continue monitoring prices and the availability of basic commodities. Regional heads should also find ways to stabilize prices, when prices of goods rise unexpectedly.

"The results from monitoring are then mapped in order to find the causes of the food price hikes. Similarly, if there are shortages of certain goods in the market, from the mapping, steps should be immediately taken to overcome the insufficient stocks," he said.

The instruction, which was stipulated in a circular from the Home Affairs Ministry on June 2, was addressed to all governors, regents and mayors. One of the steps that should be taken, the minister said, would be to improve cooperation between regions that enjoy a surplus and the areas that experienced shortages.

Separately, the chairman of the Board of Trustees of the Association of Indonesian Sugar Cane Farmers, Arum Sabil, said the import of sugar to reduce the commodity's price in the market would hurt sugar cane farmers except if the imports were in the form of raw sugar and conducted by state-owned companies.

"If the import is carried out by private companies, or in the form of sugar ready for consumption, it will definitely hurt farmers," Arum said. He added that the high price of sugar was being speculated in order to enable certain parties to benefit from imported sugar.

Meanwhile, the beef trading firm PD Dharma Jaya has ensured frozen beef from Australia totaling as much as 250 tons would arrive at the Tanjung Priok port, Jakarta, on Friday this week. The frozen beef, according to plan, will be used to increase the supply and for a market operation for this year's fasting month and Idul Fitri.

PD Dharma Jaya director Ratna DK Marina said the company had received a permit to import frozen beef from Australia and New Zealand to the quantity of 500 tons.

However, there was a delay in issuing licenses to import from New Zealand. As a result, for the time being the company would only import frozen beef from Australia.

Not effective
The use of digital applications for the procurement and distribution of commodities, such as onion, has not been effective enough to suppress price hikes.

Besides the application business still being small scale, the app system in the procurement and distribution of commodities needs an integrated system of procurement, storage, distribution, which requires substantial investment.

Deputy for commerce and industry at the office of Coordinating Economic Minister, Edy Putra Irawady, said digital applications for the procurement and distribution of commodities, such as onions, had not been effective because the operators, mostly young people, must establish systems and mapping on procurement, storage, connectivity, and distribution.

Edy said digital apps for the procurement and distribution of commodities was not just limited to facilitate sales, but also to build the system.

"The long supply chain must be shortened. Therefore, the mapping of commodity procurement, storage, and distribution must be clear," he said.

Separately, Walesa Danto of limakilo.id - the digital app designer for the procurement and distribution of onions - said the app had been applied in cooperation with farmers. "We can supply onions at a price of about 15 percent lower than the market price in Jakarta," he said.

Currently, Walesa further said, the distribution of onions reached 250 tons per week for the market in Jakarta. Related to procurement, the company was planning to cooperate with investors to procure farming areas for planting onions to assure supplies.

source: Kompas, Wednesday, June 8, 2016
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