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Jakarta Post

Rice prices cause March deflation in W. Java

Despite prices for some basic necessities rising ahead of a planned fuel-price hike, falling prices for rice and other commodities caused deflation of 0

Arya Dipa (The Jakarta Post)
Bandung
Wed, April 4, 2012 Published on Apr. 4, 2012 Published on 2012-04-04T10:16:15+07:00

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D

espite prices for some basic necessities rising ahead of a planned fuel-price hike, falling prices for rice and other commodities caused deflation of 0.02 percent in West Java over March, according to the local Central Statistics Agency (BPS).

BPS’ official in charge of statistical distribution affairs Anggoro Dwitjahyono said that food was among seven basic necessities that dropped in price.

“Food contributing to deflation are rice [-0.13 percent], chicken meat [-0.09 percent], eggs [-0.04 percent] and tomatoes [-0.02 percent],” he said in Bandung on Monday.

The price of rice dropped in March and is expected to stay down as the province enters harvest season. The price should rise again in the coming months.

Anggoro said that his office had previously estimated that the price of rice would have risen with the increased price of subsidized fuels proposed by the government.

“But ... the harvest has triggered a drop in the price of rice and paddy, or unmilled rice, despite the fact that the prices for fertilizer and seeds are rising,” he said.

Despite the drop, paddy prices remained above the government’s purchase price, stipulated in Presidential Instruction No. 3/2012 that came into effect on Feb. 27.

Dried paddy sold for Rp 3,300 (38 US cents) per kilogram at the farmer’s level and Rp 3,350 per kilogram at the rice-mill level. Milled rice sold at Rp 4,150 per kilogram at the rice-mill level.

“Based on observations in March, a number of paddy transactions in West Java were set below the government purchase price. However, some were above the price set by the government,” he said.

Prices for a number of commodities actually rose to offset much of falls in rice, including a 0.6 percent rise for chili, cayenne pepper (0.04 percent), gasoline and cooking oil (0.02 percent). Prices for filtered clove cigarettes, cement, sugar, spinach, garlic, shallots, anchovies, bananas, oranges and mujair fish, each rose 0.01 percent.

The situation was different to the country as a whole. BPS head Suryamin said the Indonesian inflation rate over March was 0.07 percent.

Inflation in the year so far was 0.88 percent.

Based on the consumer price index (IHK) in 66 cities, inflation was reported in 34 cities, with the others experiencing deflation.

The highest inflation rate was recorded in Ambon (1.33 percent). “The highest deflation was recorded in Jayapura, at -1.44 percent,” Suryamin said.

He said inflation in March was due to the rise in cayenne pepper prices in 46 cities, triggered by limited stocks from production centers.

“The highest was recorded in Kediri, at up to 86 percent,” he said.

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