Dateline Southeast Asia

Ministry: Hiked import tariffs not a means to swell Indonesian coffers

By RJ Whitehead

- Last updated on GMT

Indonesia insists the increase is not designed to protect local industries
Indonesia insists the increase is not designed to protect local industries

Related tags International trade Indonesia

Ministry: Hiked import tariffs not a means to swell Indonesian coffers

Indonesia’s recent move to raise tariffs was not designed to boost revenue, the country’s finance ministry has claimed.

The government took the decision earlier this year to hike duty on consumer goods, including food, for the second-half of this year. The move is expected to net the ministry’s a US$60m windfall by the end of 2015.

"This isn't a policy to boost revenue​,” said Indonesia’s fiscal policy chief this week. Rather, he said, it was designed to help domestic producers.

"We are facing a challenge in our industrialisation. Our domestic industry hasn't expanded as fast as it had 15 to 20 years ago​.

Growth in southeast Asia’s biggest economy, at just 4.71%, is at its slowest for nearly six years. As a result, Indonesia is struggling to develop new ways to propel growth to counter the weakness of its commodity sector.

Duty on imported tea and coffee was raised by 15 percentage points to 20%, while the tariff on meat was raised even further—to 30% from 5%.

Imports of whiskey, brandy and other spirits are now subject to duty of 150%, whereas previously, liquor duty was imposed at a flat rate of IDR125,000 (US$9.34) per litre.

Aside from its denial of government profiteering, the trade ministry has refuted suggests that the increased duty was a protectionist measure.

"We raised [tariffs] based on our national interest and it does not violate the rules​.” an official told reporters.

Hundreds sickened after two food poisoning outbreaks in Vietnam’s south

Vietnam’s south has witnessed two food poisoning outbreaks in the last fortnight, with hundreds of factory workers hospitalised in Saigon, the country’s commercial capital, and Binh Duong province.

Both outbreaks took place on industrial estates, with the official Saigon GP Daily blaming contract catering companies for taking an alleged lax approach to hygiene.

Overall, Vietnam has witnessed 84 food poisoning cases in industrial zones over the five years, affecting some 6,500 workers.

According to the World Health Organisation, Vietnam has one of the world’s fastest growing cancer rates due to companies, flaunting regulations designed to prevent chemicals mixing with food.

Burma enlists ADB’s help to speed up customs inspections

The Asian Development Bank is supporting Burmese customs officials to develop a system designed to speed up the release of goods at the country’s ports. 

Work began last week on the Authorised Economic Operators, which will allow approved trade operators with a good record of customs compliance to receive a range of customs benefits, including quicker processing.

James Lynch, an ADB official, said: “By taking this important step, customs are ensuring adherence to the Asean Economic Community blueprint and the Asean Trade in Goods Agreement, as well as ensuring the country is in line with important World Customs Organisation’s international standards and the WTO’s Trade Facilitation Agreement​.”

Harvest shortfall bringing bumper Thai pineapple prices

Prices of fresh canned pineapple from Thailand, the biggest producer, have risen by 70% in the last year, according to Mintec, the commodities analyst. 

The rise is due to tight supplies caused by bad weather—heavy rains in Thailand destroyed around half of the following year’s crop at the end of 2013. This led to a reduction in supply, in turn resulting in an increase in prices. 

Fresh Thai pineapple production this year is projected to increase, reaching 1.6m tonnes—up 18% year-on-year. 

However, due to increased export demand, prices might remain at high levels for some time as demand continues to outweigh production.

Palm oil prices lower following reduced demand for biofuels

European palm oil prices have fallen due to reduced demand for biofuels in response to the recent decline in crude oil prices. 

Following plans by Indonesia to increase the biodiesel blend this year, Malaysia also announced at the beginning of June an increase in the vegetable oil ration in their biodiesel from October 2015, to raise demand for palm oil.

Related topics Business South East Asia Food safety

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