ASEAN KEY DESTINATIONS
Indonesia deciding food import duties
To secure national food supplies amid global volatility, the government said on Thursday that it planned to allow duty-free imports of 30 different foodstuffs and agricultural products.
President Susilo Bambang Yudhoyono has voiced concern over the skyrocketing prices of food and possible scarcity if grower nations begin limiting exports to meet demand at home.
In a recent cabinet meeting, he asked ministers to secure the national food stocks to ensure the people would always have access to food at affordable prices. The government has allowed duty-free imports of rice since December 22.
Anticipating a backlash from local producers, Trade Minister Mari Elka Pangestu said they should not worry about duty-free imports hurting their income.
"They will not be left unprotected," she said.
"Moreover, it is not harvest season yet. This is only meant to maintain the stock of the National Logistics Agency [Bulog]. It will not affect the price."
If prices do fall, Mari said, Bulog will purchase the products of Indonesian farmers. In addition to guaranteeing price stability, she said, the government was also trying to maintain domestic production by providing seeds and fertilizer.
Harvests have been hit hard by the La Nina weather phenomenon, which caused heavy downpours throughout the dry season, reducing yields and contributing to higher prices.
The drop in supply has seen chili prices surge fivefold in the past year to around Rp 100,000 ($11) per kilogram, making the peppers more expensive than beef and hurting households in a nation famed for its spicy cuisine.
Some business associations welcomed the government's plan to lift the import duty.
Ratna Sari Lopies, executive director of the Indonesian Flour Mills Association, said if wheat were exempted from the import duty, flour manufacturers would not increase their prices.
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