STAPLE FOODS - Prices Remain High

The prices of staple foods, especially beef, chicken meat and eggs in various regions like Banjarmasin in South Kalimantan, Malang in East Java, Tegal in Central Java and Jayapura in Papua, to name a few, remain high. This has occurred despite the government having made efforts to overcome the price hike issue by cutting the supply chain and carrying out a series of market operations in many regions.

The price of high-quality beef in Bajarmasin still hovers around Rp 125,000 (US$9.38) to 130,000 per kilogram (kg), even though a beef market operation has already begun in the region. Since Wednesday (8/6/2016), the South Kalimantan division of the State Logistics Agency (Bulog) carried out market operations in a number of areas to allow residents to purchase frozen beef at only Rp 80,000 per kg.

 

"As of Thursday, the beef operation has been held in five locations," South Kalimantan Bulog head Alwi Umri said in the Kalindo market area, Banjarmasin, Thursday (9/6/2016).

A similar occurrence has happened in Kahaya market and Palangkaraya market. Even though the Central Kalimantan Bulog have been holding beef market operations since Wednesday, the market beef price is still Rp 120,000 to 135,000 per kg. The Central Kalimantan Bulog has provided 15 tons of beef at Rp 80,000 per kg.

Chicken meat is still sold for over Rp 30,000 per kg although it is lower than the price on Tuesday (7/6/2016) when it was sold for Rp 34,000 per kg. On Thursday the price was Rp 32,000 to 33,000 per kg.

Meanwhile, the price of beef at a number of markets in Pontianak, West Kalimantan, ranges from Rp 120,000 to 125,000 per kg.

Expensive chicken meat is also being felt by the people of Malang, East Java. The price of chicken meat at the central market has reached Rp 33,000 per kg, whereas at Blimbing Kota Malang market on Thursday it was Rp 32,000 per kg. The price was higher than what it was before the fasting month of Ramadhan, which stood at Rp 29,000 per kg.

At Induk Gadang market, the price of chicken meat has reached Rp 33,000 per kg. "The price of chicken meat keeps rising during the fasting month. At the moment, in Induk Gadang market the price has reached Rp 33,000," says Watimah, a chicken meat buyer at the market on Thursday.

Likewise, in Tegal, Central Java, beef and chicken meat prices in Tegal City and Tegal Regency, Central Java, have gone up. Currently, beef prices have reached Rp 120,000 per kg, while chicken meat is priced at Rp 36,000 per kg, as observed in a number of traditional markets in the city and regency of Tegal, including the Kota Tegal morning market, as well as markets in Banjaran, Trayeman and Pepedan.

Meanwhile in Jayapura, Papua, the prices of some basic food commodities have been rising drastically. Kompas observed that food prices at Sentral Youtefa market in Abepura District have all gone up, especially the prices of vegetables.

Executive director City-owned market operator PD Pasar Jaya, Arif Nasrudin, on Thursday said PD Pasar Jaya had called on residents to return to traditional markets, as they had offered lower prices for nine basic commodities in a market operation that would be held in 147 traditional in Jakarta. Twenty of them had started since June 4. The effects of these market operations on food prices was yet to be felt, but the company would continue to provide staple foods at lower prices to every outlet throughout the operation.

Problem of production

Indonesian Employers Association (Apindo) chairman Anton J Supit said the main problem behind the food price hike was in production. However, there had been efforts to divert the root of the problem to make it seem as though the real problem was distribution.

"The significant food problem that is occurring is creating a new problem," he said.

According to Anton, who is also the chairman of the Indonesian Poultry Companies Association, the price of broilers at the farmers' level had now risen to a decent level, after years of suffering continued losses by farmers.

At the moment, the basic cost of production of live chicken in pens per kg ranges from Rp 16,500 to 18,000. "If farmers sell for Rp 19,000 per kg of live chicken, the profit is Rp 1,000 per kg after maintaining [the chickens] for one month," he said.

According to Agriculture Minister Andi Amran Sulaiman, when visiting Penyeimbang market in Palembang, the price hike ahead of Idul Fitri was common. However, the rise had to be controlled.

"It must be ensured that the price is not too high at the consumer level. In contrast, at the producer level, the price is too low," he said.

At present, Amran said, market anomalies still occurred, where an abundance of supply did not affect high prices. Cooking oil was one example. Ahead of Ramadhan, its supply was 1.8 million tons, which far exceeded its 450,000-ton demand.

Rice also has an available supply of 2 million tons, which is more than the amount needed. This also applies for seven other commodities such as shallots, chicken and eggs, among others. The ministry has coordinated with related ministries, importers and producers to agree on price controls.

Coordination meeting on staple foods

Meanwhile, in Jakarta, the government held a coordination meeting to discuss the price issue of staple foods. "The government has been selling beef for Rp 80,000 per kg. But in turn markets prices have not been falling. We will keep on trying. We will be distributing import permits," State-owned Enterprises Minister Rini Soemarno said.

Trade Minister Thomas Lembong stressed that the government had been trying its best to safeguard the supply of rice. Last year, the government decided to import 1.5 million tons of rice from Vietnam, where now current stock at Bulog had reached 2.1 million tons. Bulog's market operation on staple foods could increase from 150,000 tons per month to 350,000 tons.

source: Kompas, Friday, June 10, 2016