Indonesian importers could face a two-year ban from trading for failing to meet an allocation threshold outlined in the South East Asian nation’s new import regulations.
Next week, licensed importers will begin filing new applications for fruit allocations between January and June 2014, as part of the new quota system announced by the Indonesian government last month.
Under the new regulations, Asiafruit understands there will be no limit on the volume of fruits importers can request to bring into the country. The full volume requested is also expected to be allocated to the importer.
However, each importer will be required to report the actual volumes imported against the volumes allocated at the end of each year. Failure to meet 80 per cent of the allocated volume is likely to result in a two-year suspension of their licence.
The move is aimed at stemming a trend which has seen third party companies - with no intention of importing fresh fruit and produce - acquiring import permits and selling them off at inflated prices, diluting returns all the way down the supply chain in the process. As a further safeguard, importers applying for licenses must also have purchase contracts in place with at least three Indonesian distributors, and proof they have back end infrastructure, such as cold storage facilities, in place.
“It is a good system as it will stop the trading of quotas,” a source from the Indonesian Fruit Importers Association said. “There are now 120 licensed fruit importers and this new system will improve trade for the genuine fruit importers.”
Several Indonesian importers have also expressed concerns with the new system, claiming its very difficult to predict allocation volumes with certainty because of the vagaries of fresh production. Therefore, importers are expected to take a cautious approach to the new regulations.
“It is likely that most fruit importers will be conservative in their calculation of volumes of fruits requested in fear of losing their license,” an unnamed Australian exporter said.
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