11/10/2009 (Jakarta Globe) - The Business Competition Supervisory Commission said it has found evidence indicating that the nation’s major producers of cooking oil have been acting as a cartel to control prices.

An official on Friday said the commission, also known as the KPPU, is planning to summon representatives of 21 companies to answer questions this week.

Cooking oil producers have denied the claims.

Ahmad Junaidi, communications director for the KPPU, said it had been closely monitoring cooking oil price movements over the past several months. The KPPU determined that the price of cooking oil spiked as usual during Ramadan but has not returned to pre-Ramadan levels, he said. Moreover, he said the KPPU had detected evidence of companies withholding supply from the market.

“A preliminary investigation shows that cooking oil companies have set up a cartel to dominate the cooking oil market, and by doing so they have violated the monopoly law,” he said.

“Our suspicion is mainly based on our survey that crude palm oil prices have been in the downward trend for several months, but so far cooking oil prices remain high.”

The price of crude palm oil spiked to a 2009 high of 2,485 ringgit ($731) a metric ton in Malaysia on Aug. 13, and has since fallen 16 percent to close at 2,085 on Friday.

The KPPU said cooking oil spiked to about Rp 9,000 (95 cents) per liter in mid-August in line with the increase in crude palm oil, but had only retreated to about

Rp 8,000 to Rp 8,500 per liter since, or 5 percent to 11 percent.

Ahmad said the KPPU would question cooking oil producers about its findings and would contact the Trade Ministry.

Joko Supriyono, the secretary general of the Indonesian Palm Oil Producers Association (Gapki), which also includes cooking oil producers, dismissed the KPPU’s allegations.

He said cooking oil producers had tried to adjust prices according to fluctuations in the price of crude palm oil.

“There is no such cartel in the local market,” Joko said.

“The KPPU’s allegations are groundless.”