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Competition watchdog probes suspected cartel influence behind rice price surge

Jakarta Globe - February 29, 2024

Alfida Rizky Febrianna, Jakarta – The Business Competition Supervisory Commission (KPPU) is currently investigating the recent surge in rice prices and the scarcity of rice stocks in traditional markets and retailers. If fraudulent activities are proven, the commission has vowed to pursue legal action.

Hilman Pujana, a member of the KPPU, revealed that they have just concluded discussions with the government and rice industry players to address the root causes and find solutions to the scarcity and price hikes in rice.

Present at the discussion were representatives from the Ministry of Trade, Ministry of Agriculture, National Food Board, Indonesian Rice Milling and Rice Entrepreneurs Association (Perpadi), and Food Station Tjipinang Jaya.

"In response to the rise in several commodity prices, KPPU routinely monitors prices, especially approaching the fasting month and Eid. We continue to oversee and monitor," said Hilman at the KPPU office on Wednesday.

According to Hilman, the discussion revealed that the scarcity and price increase in rice were influenced by weather factors such as the El Nino climate phenomenon and a decrease in rice production. The National Food Agency (Bapanas) data shows that the deficit in rice supplies has persisted for the last eight months. In January and February, domestic rice output was 2.8 million tons less than the national demand.

KPPU will continue to gather more information at the central and regional levels. Should the monitoring and inspections reveal obstacles or blockages in rice distribution, as well as indications of cartel or collusion for fraudulent practices among industry players in the distribution chain, KPPU will take decisive action.

"Law enforcement will be pursued after the announcement of the results," he explained.

Recently, the Indonesian Traditional Market Traders Association (Ikappi) expressed worry about the escalating cost of rice, citing difficulties faced by traders in securing high-quality rice due to limited stocks in milling facilities. In 2024, rice prices have surged by over 20 percent compared to the preceding year, jumping from Rp 14,000 to Rp 18,000 per kilogram.

In a cabinet meeting held on Monday, President Joko "Jokowi" Widodo called upon his ministers to address the rising food prices ahead of Ramadan.

The Bapanas anticipate that the prolonged increase in rice prices will subside in the coming weeks, just in time with the upcoming Ramadan when food demand typically picks up growth.

According to Bapanas Head Arief Prasetyo Adi, the price of dried grains from farmers' harvests has sharply declined to Rp 7,100 per kilogram from Rp 8,600, indicating that rice prices will decrease significantly in the next two or three weeks. The retail price of rice is expected to return to its usual level of around Rp 14,000 per kilogram during Ramadan.

Source: https://jakartaglobe.id/business/competition-watchdog-probes-suspected-cartel-influence-behind-rice-price-surg