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Papua New Guinea paying more for rice than we should

Trade Minister Richard Maru says Papua New Guineans are paying more for rice than they should be.

Taking particular aim at Trukai Rice, the leading rice brand in the country, Maru says the main reason for this high price is transfer pricing by Trukai’s exporter SunRice.

Minister Maru says the Trade department has conducted a study that gives them “reasonable grounds” to indicate transfer pricing.

He says comparing global prices of rice, similar to that being imported into PNG by Trukai rice, the price difference shows that Trukai prices are inflated by 20% and that inflated price is passed onto consumers.

Maru blames the Independent Consumer & Competition Commission for allowing this to happen saying there should be price control used to regulate prices.

“What the Minister is saying is an individual assessment itself,” ICCC Commissioner Paulus Ain said. “We cannot agree or disagree because we have to do an independent assessment to confirm these facts before we jump in to say this is actually happening.”

He says price control used to be applied to Trukai prior to 2009.

After an industry review in 2005 and 2009 where it was found that Trukai was no longer the only rice distributer in the country, price control was lifted.

“We have found that there was some level of competition, (so) we remove price control and put price monitoring. On a quarterly basis, Trukai informs us of the price they intend to set.”

Ain says they use Australian and New Zealand prices as benchmark to monitor the price of rice in the country and admits that they have seen a marked increase by Trukai over the years.

“Lately, after the 2009 review, there seems to be a price divide, that assessment gave us the impression that we are gradually moving away from the international bench prices so we are little bit concerned.”

Industry reviews by ICCC should be conducted every five years but after 2009 there has been no review because of no funding. An industry assessment usually cost around three to four hundred thousand kina.

Trukai was contacted for comments and EMTV was advised that a media statement will be made on the issue in the coming days.

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