Friday, March 5, 2021

Tags :

ICC | Garlic

The Indonesia Competition Commission (ICC) predicts that there will be a potential increment in the price of garlic commodities at the end of March or in the beginning of April 2021 if there is no additional supply (for example, through the realization of imports) of the commodity in the beginning of this year. Such potential is due to the possible exhaustion of garlic stocks at the end of March 2021. Up till now, garlic constitutes one of the commodities the availability of which is fulfilled through imports (approximately 80 to 90% of the total demand).

It is a well-known fact that the price fluctuation of garlic during the last 4 (four) years has always occurred in the first semester, especially from February to May. Take for example in 2020, the average price of garlic peaked at IDR48,170/kg in February, even reached IDR52,397/kg in May 2017. In the beginning of this year, based on some data, the final stock of garlic in 2020 was roughly 150 thousand tons. With the normal monthly garlic consumption scenario ranging from 40 thousand to 48 thousand tons per month, the stock at the end of 2020 could only meet the consumption of garlic until the end of March 2021. Such stock is not enough to meet the monthly needs of garlic in April 2021. The dearth of stock, if not fulfilled by additional supply, for example through the realization of imports will of course create a potential increase in the price of garlic which is likely to take place before the stock runs out. The annual garlic price fluctuation pattern may recur.

For that purpose, ICC has asked the Government to take anticipatory attitude by immediately taking measures to safeguard stocks so that the price fluctuation of garlic does not occur and competition among business actors remains maintained. It is a well-known fact that garlic is not included in the category of staple commodity. This refers to Presidential Regulation No. 71 Year 2015 regarding the Storage of Basic Needs and Essentials, which was then amended by Presidential Regulation No. 59 Year 2020 regarding Amendment to Presidential Regulation Number 71 Year 2015 regarding the Stipulation and Storage of Basic Needs and Essentials. Such condition has implications and causes that there is no need for strict intervention from the Government, especially in the form of import trade system for the commodity of Garlic. The potential problem is that the current import procedure refers to Article 88 of Law No. 13 Year 2010 regarding Horticulture (using Import Recommendation of Horticultural Products and Import Approval Letter), revised by article 33 paragraph 15, Law No. 11 Year 2020 regarding Job Creation, to be business license is issued by the Central Government, the technical regulation is made in a Government Regulation. Currently, there is no Draft Government Regulation regarding such revision. This condition may co-affect efforts made to fulfill supply through the importation of garlic.