Indonesia’s Trade Minister Enggartiasto Lukita announced a postponement of a planned industrial sugar auction amid objections from some lawmakers who fear the new way of sugar trading would lengthen the supply chain and provide chances for auction market owners to engage in corruption.
Enggartiasto said the new method, an online auction done through futures and commodity trader PT Pasar Komoditas Jakarta (PKJ), will even provide price transparency for buyers and the public. It also provides access to small and medium enterprises (SMEs) to fair prices for sugar.
This is the first time the government has instructed the food and beverage industry, including SMEs, to buy sugar through an auction.
The big firms usually buy directly from sugar refineries while SMEs buy industrial sugar that is allegedly subsequently leaked to the household market at higher prices.
“Today, I announce the postponement of the auction because of complaints about the new way. Let’s be open about who has [vested] interests [in the objection] and in the meantime, we’ll introduce the details of the new method better so everyone can understand,” Enggartiasto told reporters on June.
“SMEs will have better access to sugar and a level playing field with the big firms,” he added.
The auction will use an online bar code system that will track the information and histories of refined sugar trading from the importation of raw materials to production, sales, purchases and distribution, as arranged by Trade Ministry Regulation No. 684/M-DAG/KEP/5/2017 on refined crystal sugar (GKR) auctions.
The Indonesian Sugarcane Farmers Association (APTRI), meanwhile, supports the government, saying the method will provide SMEs access to a fair price for sugar.