The Jakarta Post
Economists are warning against roadblocks that will endanger the supply of staple food and push up prices as the Ramadan and Idul Fitri holiday season approaches and the coronavirus still grips the country.
Agriculture Ministry data indicates that there is a large enough supply of basic commodities until Ramadan and even a surplus of them, despite concerns over supply disruption caused by the COVID-19 pandemic.
Agriculture observers, however, are skeptical about the data. University of Lampung (Unila) agricultural economics professor Bustanul Arifin said people’s stockpiling behavior as a response to stricter social restrictions combined with the actual supply figure in the field would soon push up prices.
“Don’t play around with the staple food supply. Don’t let it be empty,” he warned.
Bustanul’s words reiterate numerous calls to ensure there is a sufficient supply of staple goods during the Ramadan and Idul Fitri holiday season when demand for food increases sharply. Ramadan is expected to begin on April 24, yet prices have risen well in advance despite a projected surplus until May.
Among other commodities, the Agriculture Ministry data indicated that rice is expected to have a surplus of 8.35 million tons by May while the surplus for garlic will reach 263,851 tons for garlic, 584,709 tons for sugar and 68,904 tons for bird’s eye chili, among other commodities.
However, Bustanul said the government had overestimated the rice surplus. His analysis showed a monthly deficit of about 1.08 million tons in February, bringing down rice stock from 4.26 million tons in January to 3.18 tons in February. He projected the supply in March will reach 3.97 million tons with an added production of 0.79 tons.
“If rice production in April and May is according to [the ministry's] estimation, the surplus could be a reality. But once again, the surplus pattern always fluctuates throughout the year as it follows the development of the harvest field area and added production,” he said.
He added that national rice prices, which hovered at around Rp 11,750 per kg to Rp 11,900 per kg in 2020, were not reflected in the February inflation as its prices have remained stagnant since the start of the year. This is despite the current price exceeding its ceiling price, which ranges between Rp 9,950 and Rp 11,085 per kg, depending on the province.
The increase in garlic prices, among other commodities, led to an increase in headline inflation instead to 2.98 percent in February from 2.68 percent in January. Indonesia recorded a benign inflation rate in March as the government’s measures to maintain food prices remain in check but eggs, onions and sugar prices still spiked during the month, BPS data showed on Thursday.
Yet even with the expected surplus, the average price of garlic nationwide was still at Rp 45,350 per kilogram on Friday or double the usual price of Rp 25,000 to Rp 30,000 per kg, according to the Information Center for Strategic Food Prices (PIHPS). However, the price has slightly fallen from what was above Rp 50,000 per kg in mid-February.
Sugar prices sat at Rp 18,150 per kg on Friday, exceeding the price ceiling of Rp 12,500 per kg since January as import realizations were late. Bird’s eye chili declined to Rp 44,300 per kg on Thursday from around Rp 50,000 per kg in mid-January and mid-February.
Center for Indonesian Policy Studies (CIPS) researcher Felippa Ann Amanta also calls the data “very optimistic”, considering how COVID-19 has disrupted the agriculture sector. She added that the current large-scale restrictions could potentially disrupt logistics for distribution, threatening food availability.
“If we don’t control the coronavirus spread immediately, it is also possible to have labor shortages in the supply chain, which then would hamper food security,” she said.
Institute for Development of Economics and Finance (Indef) researcher Rusli Abdullah said the tightening restrictions would also prevent many workers in Jakarta from going home to their rural areas to work during peak harvest season, delaying production.
The government has remained adamant so far. The Trade Ministry said in a statement on March 25 that the average prices of rice, cooking oil, wheat flour, soy, chicken egg and red onions were “relatively stable” as of March 24. It also noted that chicken meat, curly red chili and large red chili prices decreased compared to the previous month.
The Agriculture Ministry echoed the sentiment on Friday. “We have assured today that 11 staple foods are ready and under control to fulfill needs. Three commodities that faced problems, including sugar, garlic and brown onion, are now at a safe level,” Agriculture Minister Syahrul Yasin Limpo said during a visit to a warehouse, as quoted by a press release.