Food Prices Stay Above Reference Price

As the price of several staple foods remain above their respective reference prices, the government has set a target to control prices ahead of the Ramadhan and the Idul Fitri holiday this year.

KOMPAS/WAWAN H PRABOWO

Sacks of rice are unloaded at Kranji Baru Market, West Bekasi, West Java, on Monday (23/4/2018). The government has ensured there will be sufficient staple foods, such as rice, eggs, meat, sugar and cooking oil, for Ramadan and Idul Fitri.

JAKARTA, KOMPAS – As the price of several staple foods remain above their respective reference prices, the government has set a target to control prices ahead of the Ramadhan fasting month and the Idul Fitri religious holiday this year.

Nevertheless, obstacles in production and supply persist in curbing price hikes. Other than medium-quality rice, average nationwide prices of broiler chicken and egg, along with beef and shallots, remain above the reference price, according to data from the Information Center for Strategic Food Prices (PIHPS) released on Monday (23/4/2018). Reference prices are set in Trade Ministerial Regulation No. 27/2017 on reference prices for purchasing from farmers and selling to consumers.

Broiler chicken, for instance, costs Rp 34,150 (US$2.46) per kilogram, above the reference price of Rp 32,000 per kg. The average price for beef is Rp 114,250 per kg despite the reference price set at Rp 50,000 to Rp 105,000 per kg. Eggs are Rp 23,850 per kg (reference price is Rp 22,000 per kg) and shallots are Rp 37,650 per kg (reference price is Rp 32,000 per kg).

Farmers and traders are bracing for a shallot price hike. Many of them said that prices increased as supply dwindled. Budi Luhur farmers association head Abdul Jafar said in Bojong, Tegal regency, that many locals did not plant shallots in January-February 2018 as the price plummeted to Rp 3,000 per kg at the farmers’ level.

Meanwhile, the price of medium-quality rice has decreased in the past two months. Nevertheless, the price remains high nationwide at Rp 11,800 per kg, above the government-set price ceiling (HET) of RP 9,450 to Rp 10,250 per kg. Traders estimate that the rice price will not fluctuate significantly ahead of Ramadhan in mid-May.

The Trade Ministry said that it was monitoring staple food prices in 82 regions. In 14 monitored provinces, the ministry said that it found that the medium-quality rice price was above the HET in Yogyakarta, West Sumatra, North Sulawesi, West Java, East Nusa Tenggara, East Java and Lampung.

More difficult

Trade Minister Enggartiasto Lukita said that controlling the price of medium-quality rice was more difficult this year. Harvest yields are lower than estimates and the price has been high since the beginning of the year. At the start of 2017, the State Logistics Agency’s (Bulog) medium-quality rice stock was 1.7 million tons and the price was Rp 10.698 per kg. At the start of 2018, the Bulog stock was only 979,000 tons and the price was Rp 10.771 per kg.

The government then decided to import 500,000 tons of rice. As of April this year, 373,325 tons of rice have been imported. Enggartiasto said that the government would optimize its rice imports to stabilize its price. The ministry also requires traditional market traders to sell medium-quality rice at the HET.

If the traders cannot sell rice at the HET, Bulog will supply rice to them. “If they do not want to sell medium-quality rice, the government and its Food Task Force will summon the traders,” Enggartiasto said.

The rice price in markets has remained high even though the peak of the harvest period has ended. Karawang Johar Rice Market Traders Association head Sri Narbito said that the rice price showed a tendency to rise over the past week due to massive rice absorption by Bulog. The price of medium-quality rice at the grocers’ level in Karawang increased from between Rp 7,800 and Rp 8,000 per kg to Rp 8,300 per kg.

“Only 600 tons of rice is supplied each day as many suppliers in West Java, Central Java and East Java prefer to sell their rice to local Bulog [offices], due to the price difference,” Sri Narbito said.

East Java Governor Soekarwo said that the province had a large enough rice stock. On Friday, the stock was 147,000 tons. In June 2018, the harvest period will start in the province and estimates indicate that the overall yield will reach 996,000 tons. The head of Bulog’s Banyuwangi division, David Susanto, said that there was enough rice and harvests would continue until June this year. The division currently has 22,000 tons of rice out of a total storage capacity of 110,000 tons.

(MKN/LAS/HEN/VIO/GER/SYA/NIK/RWN/WHO/IKI)