Indonesia: Wet markets grapple with soaring prices

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Traditional market sellers and buyers may find the latest statistics intriguing, with prices of many food commodities on the rise despite recent data showing that consumer prices have deflated overall.

The Central Statistics Agency ( BPS ) reported that monthly consumer prices deflated 0.45 percent in April, bringing down annual headline inflation to 3.6 percent, well below the official 4.7 percent target for the whole year.

“Deflation? What deflation? Prices haven’t gone down for quite some time,” said Sriah, 42, who has been selling spices such as shallots and garlic at Palmerah traditional market for 13 years.

Sriah added that the prevailing price of food commodities had become unstable in recent months, calling it unusual. At her humble outdoor stall, the price of shallots has stood at Rp 45,000 per kilogram ( US$3.4 ) since late February.

Shallots, tomatoes, garlic and carrots were among items to see inflation in April, despite deflation reported in the overall consumer prices index basket. However, fuel, chili, rice, fresh fish, chicken and eggs are seeing deflating prices, according to BPS data.

Prices of raw food materials, which are responsible for much of the deflation reported by the BPS in April and account for a significant posture for the overall headline inflation, dropped 0.94 percent in April, although on a year-on-year ( yoy ) basis, they soared 8.92 percent – the most among other posts.

In Cikunir, Bekasi, where the BPS reported among the highest deflation in comparison with other cities, garlic prices doubled in the past two months to Rp 40,000 per kg, beef prices rose to Rp 120,000 per kg from Rp 90,000 per kg and tomato prices more than tripled to Rp 18,000 from Rp 5,000.

“It’s much quieter in the market these days. People are reluctant to shop with prices on the rise,” said Mustofa, a trader at Cikunir Market,

Home to the world’s highest population of Muslims, the country will observe the month-long fasting month of Ramadhan in the lead up to the two-day Idul Fitri holiday, from June to July, which is among the busiest periods for retail businesses, with many buying new clothes and making more food purchases to celebrate the end of the fasting month.

Ramadhan and Idul Fitri will likely strike the market with high demand for food commodities, with prices historically increasing the highest during the period among other times of the year.

Aware of the phenomenon, the government has conducted coordination meetings led by the Office of the Coordinating Economic Minister and agriculture and trade ministries to tame prices during Ramadhan and Idul Fitri by ensuring adequate supply and smooth distribution, especially during the festivities.

“There are several commodities that we need to be concerned with, such as red onion, garlic and chili,” said Coordinating Economic Minister Darmin Nasution, referring to the ingredients commonly used in Indonesian dishes.

President Joko “Jokowi” Widodo has stated that shallot prices cannot exceed Rp 25,000 per kg, while beef Rp 80,000 per kg, to maintain people’s purchasing power and avoid excessive food inflation.

The Agriculture Ministry will cooperate with the State Logistics Agency ( Bulog ) to supply around 23,000 tons of shallots this month, said the ministry’s food security agency head, Garjita Budi.

The ministry’s onion supply, sourced directly from the country’s farmers, accounts for more than a fifth of the country’s total monthly production, which lies at an average 100,000 tons, while around 90,000 tons is consumed nationally each month.

Meanwhile, the ministry’s farming and animal health director, Muladno Bashar, said it was preparing to import beef from 12 companies in India soon after it sent a monitoring team to the South Asian country.

Traditional market traders can only hope that the efforts will bear fruit in taming prices and ensuring adequate supply, as well as good distribution.

“We are actually used to encountering commodity price volatility, but as low-income people, we want lower and more stable prices,” said Sriah.

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