Police arrest rice speculators

Thursday, February 22, 2007
The Jakarta Post, Jakarta

Police arrested three rice wholesalers Monday for allegedly selling subsidized state rice under major brand names in order to jack up the price.

The suspects could be charged under the 1999 State Security Law, particularly Article 107 on the distribution of staple foods. If convicted, the three could receive life in prison, Jakarta Police spokesman Sr. Comr. Ketut Untung Yoga Ana said.

The three men are alleged to have purchased subsidized rice from the State Logistics Agency (Bulog) and then relabeled it in order to pass it off as higher quality rice.

One of the suspects, identified by the initials BH, was arrested by the North Jakarta Police's special crimes unit at his wholesale shop in Tanah Merah. The other two suspects, identified as KH, 31, and SY, 33, were apprehended at their homes in Cilincing, North Jakarta.

Police confiscated 175 sacks, or 8.5 tons, of Bulog rice from BH's store. A total of 1.2 tons of rice was confiscated from the houses of KH and SY, who both reportedly told officers they purchased the rice for Rp 4,200 (about 46 US cents) per kilogram and sold it for Rp 4,640 per kg.

The suspects said they had sold about seven tons of rice in the past week.

Officer Yoga said the men were illegally profiting from subsidized rice stocks released by Bulog to keep rice affordable for the poor.

"They might have bought the rice from poor people who got it from the Bulog operation, or they hired people to pose as the poor to buy the Bulog rice. They then relabeled the rice to make it appear like it was better quality rice, in order to sell it at higher prices," Yoga said.

In addition to facing charges under the State Security Law, Yoga said the suspects could also be charged with selling falsely labeled goods.

Recent floods in Greater Jakarta and in many of the country's rice-producing areas have caused prices of the commodity to rise over the past several weeks.

Despite 80,000 tons of subsidized rice being released in the city from Bulog's stockpiles and the city's primary rice market in Cipinang, East Jakarta, prices have continued climbing, reaching more than Rp 6,000 ($0.66) per kilogram. Before the floods, the price was about Rp 4,000.

Authorities believe much of the subsidized rice has failed to make its way to the intended target, the poor, instead being bought up by speculators, who turn around and resell the rice for a profit. (02)