On March 17, 2017, the Minister of Trade issued Regulation No. 16 / M-Dag / Per / 3/2017 of 2017 on Refined Sugar Cigarette Trading through the Commodity Auction Market (“PERMENDAG“). This PERMENDAG revoked earlier provisions on the letter of approval of refined sugar broiler sugar trading (SPPAGKR) vide Regulations of the Minister of Trade No. 74 / M-DAG / PER / 9/2015 on Intercosted Trading of Refined Crystal Sugar.
PERMENDAG aims to regulate the acquisition of crystal refined crystals (“GKR”) in the commodity auction market so as to provide equal business opportunities for large industries and small industries in obtaining GKR.
PERMENDAG defines GKR as the sugar used as the raw material n the production process that meets SNI 3140.2-2011 with ICUMSA number where highest 45 IU and with ICUMSA number where highest is 80 IU. The auction market of commodities is e a facility of trading GKR in an organized physical market for sellers and buyers to make commodity transactions, or through an online auction system with transaction guarantees and commodity delivery. The GKR auction market is organized by a corporation, incorporated as a Limited Liability Company, which operates the GKR Auction Market using the National Sugar Trading System electronically, which has been awarded by the Minister of Trade (“Organizer”). The selection process of the organizers is done by referring to the mechanism for the provision of government goods/services. The Organizer shall report the GKR trade through the GKR Auction Market to the Minister c.q. Director General of Domestic Trade, Director General of Foreign Trade, Director General of Consumer Protection and Commercial Compliance, and Head of Commodity Futures Trading Supervisory Agency.
In trading activities, the organizer of the Auction Market for Refined Sugar Crystals is followed by sellers and buyers who get approval from the organizers. Sellers carry out daily trading activities within the auction market. Raw sugar imported and processed into GKR by GKR producers shall be sold at the GKR Auction Market. Producers of Refined Crystal Sugar that have agreements or contracts for the sale and marketing of GKR to the GKR user industry, may still enter into agreements or contracts for GKR sellers and marketing. An agreement or contract for the sale and marketing of GKR must be registered and be verified from the Organizer no later than 30 (thirty) working days from the effective trading date in the auction market GKR.
Buyers who conduct daily trading activities in the GKR Auction Market consist of large and small and medium-sized industries that have related licenses; cooperatives and small and medium-sized businesses that have obtained related licenses; as well as groups of Micro, Small and Medium Enterprises (MSMEs). Buyers may only purchase GKR for their own use and may not be distributed to other parties.
With the issuance of PERMENDAG, the distribution activities of Refined Crystal Sugar become more controllable. From the seller’s side, the agreement or contract for the sale and marketing of Refined Crystal Sugar shall be registered and verified by the Organizer. From the buyer side, the prohibition to distribute Refined Crystal Sugar to other third parties makes the distribution of Refined Sugar Crystals more controlled and monitored. Furthermore, the Minister of Trade exercises direct control over prices by fixing the lower price limits and the upper price limits referred to as price limits in the sale and purchase transactions in the GKR Auction Market.
The Auction Market for Refined Sugar Crystals also has a role in controlling the distribution activities of Refined Crystal Sugar as a means of selling raw sugar imported and processed into Refined Crystal Sugar by Refined Crystal Sugar producers.
With the obligation of GKR trading activities through the Commodity Auction Market, large and small industries now have equal opportunity in obtaining GKR.
9 Mei 2017 – 003/AP‐LH/V/2017 -TWK-