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Surging import costs hit food industry
Confronted with high global commodity prices, many Indonesian food and beverage companies have begun to ask more for their products.
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Food security in Indonesia is most often understood as self-sufficiency in rice production, despite the country’s diverse range of food sources. (Shutterstock/Billion )
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rappling with surging global commodity prices, many Indonesian food and beverage producers are beginning to ask more for their products in a phenomenon known as imported inflation.
The Food and Agriculture Organization’s (FAO) food price index averaged at 125.8 points last year, 28.24 percent higher than in 2020. In January this year, the monthly index hit an all-time high of 135.7 points.
Vegetable oils led with the greatest surge, rising 65.9 percent in 2021, followed by sugar at 37.48 percent and cereals – which include wheat and soybean – at 27.26 percent, while meat rose by 12.88 percent.
The food price rise has been triggered by multiple factors, namely climate change, rising global demand, higher freight costs, the use of food crops for energy production and geopolitical tensions.
Indonesian Food and Beverage Industry Association (Gapmmi) chairman Adhi Lukman said the rise had deeply impacted local businesses as prices of sugar, soybeans, vegetable oil and many other ingredients had risen tremendously.
For the last two years, firms in the industry had sacrificed margins to keep prices stable for consumers, but now, Adhi said, was different.
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