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Cold storage shortage will hamper beef market operations: Economist
The government’s attempts to bring the price of beef below Rp 80,000 (US$6) per kilogram will be stymied by the lack of storage facilities, Institute for Development of Economics and Finance (INDEF) economy Enny Sri Hartati has said.
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A woman buys beef at a stall in Aceh. (The Jakarta Post/A. Kurniawan Ulung)
T
he government’s attempts to bring the price of beef below Rp 80,000 (US$6) per kilogram will be stymied by a lack of cold storage facilities, Institute for Development of Economics and Finance (INDEF) economy Enny Sri Hartati has said.
By granting larger beef quota imports, Indonesia may import beef from other countries such as Singapore and Australia, where beef prices are around Rp 60,000 and Rp 50,000 per kg, respectively.
"Adding in logistics costs, the price will be around Rp 70,000 per kg in Indonesia. However, this is frozen meat, not fresh meat. It won’t be a problem if it can all be sold within one day; if not, it will lead to losses on the part of Bulog," Enny said on Thursday in Jakarta.
According to Enny, the State Logistics Agency (Bulog) still lacks cold storage facilities. As such, keeping beef for long-term distribution would be problematic, an issue exacerbated by the preponderance of market operations in traditional markets entirely lacking in cold storage.
To cover the losses, Enny warned, Bulog would boost the margins of other products, which ultimately would also hit the people.
"Having born losses after complying with the instruction to manage cattle from East Nusa Tenggara, [Bulog] has attempted to make up for it with the right to import corn, leading to skyrocketing corn prices," she said.
On the consumer side, Enny further explained, Indonesians were not used to frozen meat. "Frozen meat contains fat and water, which is not appealing to Indonesian consumers. As such, they will always opt for fresh meat, even when it's sold at Rp 120,000 a kilo while frozen meat costs Rp 80,000 a kilo," she said. (ags)
