There are new regulations, wheat flour production can run smoothly again

Improvements in policies regulating imports of goods provide convenience for certain sectors, but also leave gaps.

KOMPAS/TOTOK WIJAYANTO (TOK)

Workers are unloading wheat flour that will be shipped to Natuna Island using a boat at Sunda Kelapa Port, Jakarta on Friday (30/6/2023). According to BPS data, inter-regional trading value in Indonesia has declined. The trading value in 2021 was Rp 1.129,51 trillion. This achievement is lower than in 2020, 2019, and 2018, which were respectively Rp 1.196,98 trillion, Rp 1.628 trillion, and Rp 2.099,91 trillion.

JAKARTA, KOMPAS — The issuance of Minister of Trade Regulation or Minister of Trade Regulation Number 7 of 2024 concerning the Second Amendment to Minister of Trade Regulation No. 36/2023 concerning Policy and Import Regulations means that wheat flour production can return smoothly. With the issuance of this revision, the import of fortifying premixes which are one of the additional raw materials returns to the original process which does not require many conditions.

Executive Director of the Indonesian Wheat Flour Association (Aptindo) Ratna Sari Loppies said that the issuance of Minister of Trade Regulation No. 7/2024 returned the import process to be as easy as before. Initially, they could directly import fortified premixes simply by using a surveyor (LS) report. However, in Minister of Trade Regulation No. 36/2023 before it was revised, imports of fortified premixes required LS and were accompanied by an import approval (PI).

Ratna explained that fortification premix is one of the raw materials needed to ensure that wheat flour production meets Indonesian National Standards (SNI) requirements. One of the quality requirements for wheat flour is mandatory fortification, which involves the addition of vitamins and minerals. Previously, Minister of Trade Regulation No. 36/2023 made importing fortification premix more difficult. However, manufacturers require fortification premix to meet the SNI in their production.

Also read: Import of Product Samples for the Footwear Industry is Now Restricted-Free

The production of wheat flour was also threatened with a decline. Last April 2024, Aptindo admitted difficulty in obtaining fortification premixes which caused a national wheat flour supply to decrease by up to 50 percent. This scarcity has the potential to raise the price of wheat flour in the market. However, those concerns did not come to fruition due to changes in regulations in Permendag No. 7/2024 released on April 29 and effective on May 6, 2024.

"Now, with the issuance of Trade Ministry Regulation No. 7/2024 as the second revision of Trade Ministry Regulation No. 36/2023, the import process for fortification premixes has returned to its original form, which only requires a Letter of Credit," said Ratna when contacted in Jakarta on Friday (3/5/2024).

There are still gaps

Different reactions were expressed by the Chairman of the Indonesian Association of Fiber and Filament Yarn Producers (Apsyfi), Redma Gita Wiraswasta. According to him, Trade Minister Regulation No. 7/2024 is good for supporting the growth of domestic industries by protecting the market through import regulation of goods. One of the regulated imported goods is textiles and textile products.

However, according to Gita, there is still a loophole in the Minister of Trade Regulation No. 7/2024, where importers can disguise themselves as Indonesian migrant workers (PMI) when they intend to import goods into the country. This is because the regulation emphasizes the Ministry of Finance Regulation No. 141/2023 concerning the Import of Goods by Indonesian Migrant Workers.

Importers can impersonate Indonesian migrant workers (PMI) when they want to import goods into the country.

Article 4 of the regulation states that the PMI obtains duty-free facilities with a customs value of up to 500 US dollars. This can be done a maximum of three times in a calendar year.

Also read: No Longer Restricted, Types of Goods Sent by Migrant Workers and Personal Luggage of Passengers

With 500 US dollars, said Gita, someone could bring in 200 pieces of clothing to Indonesia. This amount is not normal for a migrant worker who brings home clothes and souvenirs. "Isn't it strange for a migrant worker to bring in 200 pieces of clothing? That's called a disguised or pretending importer as a migrant worker who brings goods here," she said.

Gita illustrated that if a migrant worker brings goods into the country three times a year, there will be a total of goods worth 1,500 US dollars, equivalent to 600 pieces of clothing. It is feared that this mode could potentially be applied by hundreds or thousands of Indonesian migrant workers. "This is a gap exploited by importers," he said.

KOMPAS/P RADITYA MAHENDRA YASA

Second-hand imported clothing and bags seized by officials from the Central Java and DI Yogyakarta Directorate General of Customs and Excise were taken as evidence and stored in the Tanjung Emas customs warehouse in Semarang City, Central Java, on Wednesday (20/12/2023). The seizure amounted to 537 bales or sacks worth two billion rupiahs, which entered through Kendal Port without proper documentation.

Gita added that the regulation of textile and textile product imports is actually good because the market in downstream industries, such as garment, has started to grow. As a result, the demand in upstream industries, such as fabric, thread, and fiber, also increases. However, if there is a gap like the one illustrated, this industry could falter again. This is because the market is growing downstream and will provide demand upstream.

In addition to the certainty and ease of raw materials, industrial players also need support with market protection from both legal and illegal imports.

Meanwhile, Executive Director of the Center of Reform on Economics (CORE) Mohammad Faisal said that the initial spirit of Minister of Trade Regulation No. 36/2023 before it was revised twice was to regulate imports. However, the contents of this regulation actually regulate the import of raw and auxiliary materials. In fact, the manufacturing industry really needs easy and guaranteed access to raw materials to support its production.

In addition to the certainty and ease of raw materials, industrial actors need support with market protection from the onslaught of imports, both legal and illegal. "So, the government should have a perspective to regulate imports, but at the same time ensure the continuity of raw material supply," said Faisal.

Also read: Lessons Behind the Spike in Import Duty Bills for Imported Shoes, Robots and Braille Keyboards