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Indonesia reforms industrial sugar trading, kicks off auction system

After being on hold for weeks, the government has announced that an industrial sugar auction will resume and has asked food and beverage firms to register as buyers through futures and commodity trader PT Pasar Komoditas Jakarta (PKJ).

Futures Exchange Supervisory Board (Bappebti) head Bachrul Chairi said the auction would be held at the latest on Oct. 1 and the board was preparing to promote the auction across the country.

As of earlier this week, 200 buyers, mostly medium and big firms, have registered.

“We will promote the auction across the country, especially in big cities, where many food and beverage firms are located,” he said via phone on Thursday.

On Wednesday, House of Representatives Commission VI overseeing trade approved a Trade Ministry proposal to introduce the auction system for the distribution of industrial sugar, a key ingredient in food and confectionary manufacturing as well as the catering, baking, pharmaceutical and beverage industries.

The ministry said the new system would improve transparency and provide fair prices for small and medium enterprises.

Previously, some lawmakers were concerned that this new method of sugar trading would lengthen the supply chain and create inefficiencies.

This is the first time the government has instructed businesspeople to buy sugar through an online auction. (hwa)

Source: The Jakarta Post