ICC Conducts Supervisory Actions in the Midst of COVID-19 Pandemic
Indonesia Competition Commission (ICC) continues to supervise competition in the market, in spite of the Large-Scale Social Restrictions (PSBB) imposed in Jakarta. The supervision is especially conducted towards businesses engaging in basic commodities, including sugar, rice, beef, chicken, and eggs. For this purpose, ICC has carried out data collection activities related to such commodities.
"The ICC deems that in the current COVID-19 emergency period, the availability of staples and medical devices at reasonable prices to meet the needs of the people is extremely crucial. Very high price spikes constitute an entry point for our law enforcement efforts. Therefore, we have collected data related to the prices and supply of basic commodities for the Government and various parties," explained Mr. Guntur S. Saragih, Commissioner of ICC.
In conducting such supervision, the ICC has coordinated with the Ministry of Agriculture, the Ministry of Trade, the Secretariat of the Staples Market Monitoring System, the Statistics Indonesia, and the Corruption Eradication Commission. The ICC is also in the process of collecting data of 250 businesses providing basic commodities. Sugar is the main priority currently handled by the ICC.
"Based on one of our internal studies, we found that there are problems related to the high price of sugar. Retail business actors limit the amount of sugar that can be purchased by consumers. Other staples in general have yet to show excessive price hikes. The increases can occur due to the problems with inaccurate national production data, logistical constraints during the COVID-19 outbreak, and the behaviors of business actors themselves," said Guntur.
Guntur further explained, the national sugar demand until Eid al-Fitr this year could reach 1.14 million tons. From this amount, approximately 650 thousand tons were filled with the stock of last year, while the rest (around 500 thousand tons) was obtained from imports. Therefore, the timing for the issuance of import approval becomes important in influencing market prices. The Ministry of Trade itself on March 3, 2020 issued Import Permit (SPI) in the amount of 438.8 thousand tons for red crystal sugar which is used as the raw material of white crystal sugar.
"We consider the amount of sugar import quota in the import agreement will be adequate. However, since the expenditure was rather late, only a few quota has been fulfilled. The government should have issued the permit earlier because the amount needed was known since the beginning of the year," said Guntur.
This lack of supply resulted in the increase of the price of sugar in all provinces, above the highest retail price at the consumer level since March 24, 2020. On average, based on the data from the National Strategic Food Price Information Center (PIHPS), the sugar prices is in the range of Rp18,000/kg in traditional markets, far above the Highest Retail Price at the consumer level being worth Rp12,500/kg.
Therefore, the Government should encourage the realization of imports. If necessary, the Government provides financial assistance to enable the Logistic Affairs Board (Bulog) or State-Owned Enterprises (BUMN) to expedite the import of sugar.
The ICC hopes that such realization will take place at the soonest possible time in order to avoid higher price of sugar and to anticipate the losses of sugar cane farmers who will harvest their sugar canes in the second semester. If imports are delayed when the sugar cane farmers harvest their crops, they will be affected with the fall of the selling price of the sugar canes in the primary market.