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Govt wants to change Idul Fitri ‘price hike’ tradition
During Idul Fitri season, when people mostly boost their consumption amid increasing purchasing power, soaring food prices are usually taken for granted as a “tradition
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During Idul Fitri season, when people mostly boost their consumption amid increasing purchasing power, soaring food prices are usually taken for granted as a “tradition.” This year, however, President Joko “Jokowi” Widodo’s administration wants a radical change in the situation.
The government has taken all available measures to raise the stocks of staple foods to a safe level, allowing it to swiftly intervene in the market when food prices start to escalate beyond the government’s price ceilings.
Meanwhile, trade agencies in each region will continue reporting stock levels and prices to the Trade Ministry while the Food Task Force — led by the National Police — will keep supervising on the ground to prevent any price fixing by producers, distributors, importers or traders.
“First off, I would like to express my highest gratitude as food commodities seem to be in a good and stable position with the upcoming Idul Fitri festivities this year,” Jokowi said in his remarks at a closed-door plenary Cabinet meeting on Thursday.
The government’s price ceilings for sugar and bulk cooking oil are set at Rp 12,500 (93 US cents) per kilogram and Rp 11,000, respectively. Fresh beef at Rp 98,000 to Rp 105,000 per kg depending on the quality and broiler chicken and eggs at Rp 32,000 and Rp 22,000 per kg, respectively.
Rice, shallots and garlic, meanwhile, are set at Rp 9,500 and Rp 32,000 per kg; and around Rp 38,000, respectively. The price ceiling for garlic has changed over time in accordance with stock, which is imported from China.
The average real prices, according to data from the ministry website, show stable prices at around the aforementioned set of prices. From the last week of May, prices of cooking oil and fresh beef have been hovering at around Rp 12,200 and Rp 115,000 per kg, respectively.
Broiler chicken and eggs have even been slightly lower than the maximum prices at Rp 31,000 and Rp 22,000 per kg; while rice is stable at Rp 10,500; sugar is Rp 13,400; shallots are around Rp 32,000. Chili is currently fluctuating between Rp 26,000 and Rp 30,000 per kg.
“Approaching Idul Fitri, demand has been increasing by 30 to 50 percent this week but stocks of all staple foods are safe,” Trade Minister Enggartiasto “Enggar” Lukita told a press briefing on food price stability on Thursday evening.
The consistent stock and price monitoring has allowed the government to send supplies more quickly to regions facing shortages. Several regions outside Java that have faced beef shortages, Enggar said, had seen immediate price normalization due to state logistics agency Bulog’s response.
With such a strategy, Enggar eager to see the prices keep hovering at similar level, even a week after the festive.
“It’s actually easy to control prices. There are only a few big distributors of rice and sugar and the government has instructed them to follow its rule. Once rice and sugar prices are stable, other staples will usually follow,” economist Iman Sugema from the Bogor Institute of Agriculture (IPB) said over the phone.
The ministry has mandated Bulog to buy shallots from Brebes farmers at a price floor of Rp 22,500 per kg, while the chicken issue will be tackled soon in coordination with the Agriculture Ministry.
The government has also arranged an agreement with beef importers and Bulog to sell frozen beef and Indian buffalo meat at a maximum price of Rp 85,000 and Rp 80,000 per kg, respectively, to help meet demand for meat aside from fresh beef.
