February 23, 2015

23/02/2015: Indonesian Government to commission audit on rice stockpiles amid price rise

The Indonesian Trade Ministry is planning to have at least 14,000 warehouses across the country audited amid suspicions of the illegal stockpiling and reselling of rice, which has allegedly caused prices to inflate by 30 percent, The Jakarta Post reports.

According to ministry officials, any storagehouse vendors found guilty of intentionally hoarding rice will be severely punished.

“Together with [independent auditing company] PT Sucofindo, we will conduct an audit on warehouse contents, distribution chains and their owners, starting this week,” said Srie Agustina, the ministry’s director general for domestic trade.


The Trade Ministry has yet to openly punish foul play in recent weeks, as it aims to catch worse-offending warehouse owners in the act.

“Going forward, however, we will start punishing perpetrators by filing charges,” she said.

“Those found guilty of illegal stockpiling could face up to five years of prison and fines of Rp 50 billion (US$3.9 million), on top of having their licenses revoked.”

Ministry officials recently discovered indications of foul play in one of the warehouses in Jakarta that stockpile rice from the State Logistics Agency (Bulog).

They reportedly found rice blends comprising government-issued rice and other brands — colloquially known as beras oplosan — to be shipped and sold outside the capital.

This modus operandi is thought to be one of the reasons behind the food crop’s recent 30 percent price hike.

The government has always endeavored to keep the price of rice stable. Rice is a key contributor to inflation and, historically, fluctuation in the price of rice has led to political instability.

Trade Minister Rachmat Gobel said that the government would do its best to rid the country of the so-called rice mob that was responsible for such illicit acts.

“The rice mafia is real and it has to be eradicated,” Rachmat told reporters.

Suspicions arose after 1800 tons of Bulog rice was found circulating in the Cipinang Wholesale Rice Market in East Jakarta, even though the logistics agency claimed that it had not recently distributed any rice from its warehouse.

“I received reports that the rice on the market wasn’t from the Bulog warehouse. So who did this?”

Rachmat asked, while also urging the state-owned enterprise to evaluate its distribution channels and prevent such misdeeds from recurring.

According to the minister, the government distributed 75,000 tons of Bulog rice — bought from local farmers and stockpiled to be sold later to keep prices in check – by way of market operations between December and January, which did little to contain rising prices.

On February 16, the country decided to deploy the Bulog task force to distribute rice directly to the masses at 12 traditional markets and 50 settlement areas in Greater Jakarta, with the option of expanding its outreach if prices showed no signs of tapering by the end of the month.

The agency currently distributes rice at a fixed price of Rp 7400 per kilogram on the market.

Meanwhile, Bulog’s newly-installed president director, Lenny Sugihat, said on Friday that she would not tolerate any such wrongdoing, even within her own ranks.

“If there is any indication that someone within Bulog was ‘playing around’, I will pursue them,” she promised.

Read the article HERE.

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