ICC Still Conducts Supervisory Actions, Despite The Covid-19 Pandemi.

Though DKI Jakarta being the site of Headquarter of the Indonesia Competition Commission (ICC) has imposed Large-Scale Social Restrictions (PSBB), ICC continues working to supervise competition conducted by business actors. The supervision is conducted especially for business actors engaging in staple commodities, including sugar, rice, beef and chicken, eggs, and so on. For this purpose, ICC has carried out various data collection activities related to such staples.

“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 community is extremely crucial. Very high price spikes constitute an entry point for our law enforcement efforts. We therefore have collected data related to the prices and supply of basic commodities to the Government and various parties,” explained one of the ICC members, Guntur S. Saragih.

In conducting such supervision, ICC has established coordination in terms of data collection 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. ICC is also in the process of collecting data on 250 business actors in such various staples. Sugar is the main priority currently handled by ICC.

“Based on one of our internal studies, we found that there are problems related to the high price of sugar amid the community. Even in the market, 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 explained, the national sugar demand until Eid al-Fitr or Lebaran this year could reach 1.14 million tons. Out of 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 had issued Import Permit (SPI) in the amount  of 438.8 thousand tons for red crystal sugar which is used as raw material for white crystal sugar for consumption.

“We consider that the amount of sugar import quota in the import agreement should be adequate. However, since the expenditure was rather late, only a few were realized. The government should have issued the permit earlier, because the raft of needs have been known since the beginning of the year,” explained Guntur.

This lack of supply has resulted in the price of sugar in all provinces being 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), sugar prices are 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 so that the Logistic Affairs Board (Bulog) or State-Owned Enterprises (BUMN) can immediately realize the import of sugar in a short time.

ICC hopes that such realization will take place in the soonest possible time in order to avoid the high 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 and do occur when the sugar cane farmers harvest their crops, they will be affected by the fall of the selling price of the sugar canes at the farmer level.