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The government has ruled out taking action to help bring milk
prices under control after they rose by over 100 percent since January
of this year.
Trade Minister Mari Elka Pengestu said Wednesday that her ministry
would not introduce price stabilization measures, as it did in the case
of rice and cooking oil, as milk was not included on the list of basic
foodstuffs.
"Besides, the government doesn't have price control legislation, like
Malaysia has, under which it can regulate the prices of particular
items," Mari was quoted Wednesday by detik.com as saying.
However, she said she would work with the health minister to come up
with a plan to help those in the lower income brackets who had to buy
infant formula milk.
The global surge in milk prices has been triggered largely by droughts
in a number of major producers and high demand from China and India. As
a result, global powdered milk prices have doubled from between
US$2,000 and $2,500 per ton to between $4,000 and $4,500 since the
start of the year.
This has led to a corresponding surge in powdered milk prices in
Indonesia, up from between Rp 25,000 ($2.89) and Rp 27,000 per kilogram
in January to around Rp 51,000 this month.
According to Indonesian Food and Beverage Manufacturers Association
(GAPMMI) chairman Thomas Darmawan, milk producers Nestle, Frisian Flag
and Nutricia have increased their powdered milk prices in response to
the rising global prices.
Meanwhile, Thomas urged the government to take action to control rising
powdered milk prices.
"The government should give dairy farmers aid in the form of cattle
feeds and incentives, and help them develop their farms so that they
can produce more milk," he said.
"If the government cannot help us increase national milk production, it
should allow powdered milk producers to import from Argentina and
European countries like Poland," he said.
Indonesia, which produces 570,000 tons of milk annually, imports
between 200,000 and 250,000 tons of powdered milk from Australia, New
Zealand and Canada.
Thomas said that the government also need to remove import duty on milk
from the current level of around 5-10 percent so as to bring down
production costs and eventually milk prices.
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