Thursday, July 23, 2020

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ICC values that the price of granular sugar in the public is still categorized as high, although imported sugar has entered the market. The issue of granular sugar has shifted from the delayed issuance of the Import Approval (SPI) to the interrupted distribution of products existing domestically. This condition constitutes a problem that involves the behaviors of the related business actors. Therefore, the ICC lifts up the status of the supervision of Granular Sugar to become initiative proceedings in law enforcement.

The raising of status from such sectoral assessment was conducted in order to further focus the supervision of ICC on the behaviors of producers and distributors in meeting the national sugar needs. This is in view of the possibility of regulating the distribution of granular sugar alleged to pose high prices of granular sugar, despite the adequate import realization.

One of the underlying matters taken into account by ICC is the phenomenon of high sugar prices in the public. If compared to the data issued by the International Sugar Organization, the price of the national sugar can reach 240%-260% higher as compared to the international prices in April and May 2020. The existence of very high disparity of the price of the national sugar and that of the international one certainly creates incentives for producers to import sugar instead of increasing the production or absorbing domestic products.

The assessment conducted by ICC shows that the amount of the quota of sugar import in the import approval should be adequate, however, due to the somewhat delayed issuance of the permit, only a few has been realized. So, it is alleged that it co-contributes to the high price of sugar. The issues of the issuance of Import Approval and import realization have been resolved by the realization of approximately 400 thousand tons, however, prices in the market are still quite high. The assessment conducted by ICC shows that the national sugar price on average in traditional markets during the May 2020 period, reached 44% above the reference price of the consumer-level sales, meanwhile the national average sugar price in the modern retail market reached 24% above the reference price. Not only that, the auction price of sugar on average in 2020 was in the range of IDR12,000 per kilogram, not being far from the reference price at the consumer level (IDR12,500/kg). Even the auction price was above the reference price for a time.

As a follow-up to such various facts resulting from the findings of the assessment, ICC has decided to raise and focus its oversight status on the behaviors of producers and distributors as an initiative under the existing law enforcement proceedings.