Govt To Stabilize Soaring Garlic, Onion Prices

News Focus - GOVT TO STABILIZE SOARING GARLIC, ONION PRICES by Andi Abdussalam Jakarta, March 14 (Antara) - The Indonesian government is now reviewing its regulations on import restriction of horticultural products in an effort to stabilize soaring garlic and onion prices in the domestic market. "I appeal to the agriculture and trade ministers to meet as soon as possible to discuss the agriculture and trade ministers` regulations, particularly with regard to the importation of garlic and onion to increase supply in the local market," Chief Economic Minister Hatta Rajasa said at the Presidential Office, here, on Wednesday. Inflation in February shot up to 0.75 percent -- the highest rate in the same month over the past ten years-- due to increase in the prices of food products. Hatta said the time for import restriction on garlic was not correct now because farmers at home could only supply about 5 percent of the domestic need. "It is quite unreasonable if garlic price contributed 0.17-021 percent of the inflation in February which was 0.75 percent. The minister of agriculture and the minister of trade should hold bilateral meetings to discuss and overcome this problem," Hatta said. The result of the bilateral meeting should be taken to the coordinating minister for economic affairs to be discussed. The essence is that supply in domestic market must be met, according to Hatta. He said that the policy to restrict import was not wrong but a policy should be taken by taking into account existing conditions so that its impact would not cause market distortion. "If market distortion takes place it will drive up prices and generate inflation. So, we have to pay attention to this problem," he said. The government has banned or restricted the importation of horticultural products in an effort to protect local farmers at home. However supply ran short causing prices, particularly that of garlic, in different parts of the country to skyrocket. For the second phase, as per January-June 2013, the government has imposed a ban on the importation of durian, banana, pineapple and a restriction on the importation of melon, mango, papaya, potatoes, cabbage, carrots, peppers, onions, garlic, broccoli, orchids, chrysanthemums and heliconia flowers in an effort to protect local growers and boost the country`s horticultural production. The garlic price in Jakarta`s Kramat Jati wholesale market was recorded at Rp19,306 per kg in January. It rose to Rp25,964 per kg in February and up to March 7, it has reached Rp32,000 per kg. Garlic was the main contributor to the February inflation with average price increase of 30.25 percent in 64 cities grouped in the consumer price index (IHK). The highest price increase took place in Bandung, West Java, reaching 60 percent and followed by Serang, Banten (56 percent). At present, the prices of garlic in various parts of the country have reached a range between Rp45,000 per kg and Rp85 per kg. Referring to the garlic price increase, President Susilo Bambang Yudhoyono called on all parties to contribute to normalizing prices. "We invite all sides including big traders to help create a good condition in the country so that our people could afford their daily consumption needs such as food," the head of state said. The president also pointed out that the government would put in order food trade regulations in an effort to ensure food supply which was affordable by the people. He called for transparent disclosure of data on onion supply, demand, consumption and production so that the government would take a correct policy. "Transparent data is needed in deciding a policy. We need transparent data on how much we produce and how much we need so that we can make a correct calculation," the president told a press conference on Wednesday. He said that accurate data were needed from all sides including the Central Bureau of Statistics (BPS) and the Ministry of Agriculture. In this case, the Ministry of Agriculture and the Ministry of Trade will conduct an investigation on the causes of supply scarcity and price increases. They will audit importers whether or not they have carried out imports. "We will soon carry out investigations to know whether the price increases are caused by stock hoarding by importers or by other causes," Agriculture Minister Suswono said. He said that through investigation the government was expected to obtain accurate information in its efforts to guarantee garlic supply and lower its prices. "If need be, we will invite all importers so that we can conduct an overall auditing on them," the agriculture minister said. Suswono said the investigation would be conducted in the warehouses of the importers in one or two weeks ahead. He said the price of garlic had reached about Rp45,000 per kg from the normal price of Rp12,000 kg per kg. The price of onions also increased from the normal price of Rp13,000 per gk to Rp40,000 per kg. On the occasion, the minister said he would verify data on 114 registered garlic importers this year. Of the 131 registered importers, 114 of them were allowed to import garlic (based on the garlic import restriction regulation). The number of registered importers was too high so that each of them would only have a small quota. He said he was suspicious that a number of registered importers had misused their permits and sold their quota to big companies. Therefore, the ministry of agriculture and the ministry of trade will coordinate to deal with this matter. As part of the efforts to solve the shortage of garlic supply and lower its price, the trade minister has issued 16 garlic import permits (SPI). "Previously we have constraints in issuing import permits based on the government regulation. But on Thursday, March 7, 2013, the director general for external trade signed 16 import permits (SPI) based on a Horticultural Product Import Recommendations (RIPH) issued by the agriculture ministry," Srie Agustina, director general for internal trade affairs, said. She said the issuance of the SPI for 16 importers was expected to increase garlic supply by 29,136 tons or by about 18.21 percent of the total garlic import allocation of 160,000 tons in the first semester of 2013. "We have provided import permits to 16 importers. The ministry of trade is also still in process of issuing 26 others for the importation of garlic based on the RIPH," said Srie. She said the garlic would be imported from China and India. It would take two weeks before the commodity could be supplied to the domestic market.