Think-Tank Calls for More Staple Food Imports Ahead of Ramadan

The government may need to import staple foods ahead of Ramadan, as existing policies to reduce prices have yet to make an impact, a Jakarta-based think-tank said on Monday (10/04). (Antara Photo/Prasetia Fauzani)

By : Tabita Diela | on 7:01 PM April 10, 2017
Category : Business, Economy

Jakarta. The government may need to import staple foods ahead of Ramadan, as existing policies to reduce prices have yet to make an impact, a Jakarta-based think-tank said on Monday (10/04).

A study conducted by the Center for Indonesian Policy Studies (CIPS) showed that an average family of four in Jakarta could have saved Rp 401,000 ($30) on monthly groceries in March if food items in the archipelago were as affordable as in other countries in the region.

According to the center's Monthly Household Expenses Index, nearly 23 percent of household income in Indonesia was wasted on higher food prices in February.

The index tracks prices of basic food items — including sugar, beef, rice, eggs and chicken — in major cities throughout the Asia-Pacific and Oceanic regions, including in Singapore, Malaysia, the Philippines, Thailand, India, Australia and New Zealand.

The cost of grocery items in the world's largest Muslim-majority country are expected to swell in coming weeks as people prepare for the fasting month, which will start in May.

"Food prices [in Indonesia] were already starting to rise two months before Ramadan," Hizkia Respatiadi, a CIPS researcher, said in a statement on Monday. "If the government doesn't provide access to cheaper staple food items, we will all pay the price."

Hizkia said the lack of access to affordable, high-quality food will affect poor households the most and may cause the younger generation to suffer from malnutrition and stunted growth.

According to the latest data by the Central Statistics Agency (BPS), there are nearly 386,000 residents in Jakarta who live on less than Rp 521,000 per month.

The CIPS study suggests that a family of four can save Rp 233,000 per month if the cost of rice in the country were the same as in Thailand. The think-tank also noted that the global market price of rice declined 4.4 percent in February from the same month last year, yet the cost of the staple in Indonesia remained constant.

"In the short term, Indonesia needs to import more key food items to keep prices low," Hizkia said.

He said the current beef import quota is "encouraging corruption" among politicians and businesses, instead of making meat products more affordable.

However, the government remains confident that its existing policies will be sufficient to avoid steep price increases ahead of Ramadan.

One government measure to ensure affordable food prices is the Sea Toll Road  launched in 2015  which provides a network of regular food shipments to ports across the archipelago, aimed at reducing vast price gaps in the region.

A central bank-sponsored web portal, Hargapangan.id, shows average food prices and scarcity throughout the country, a useful guide for the government in directing much-needed food deliveries.

The Finance Ministry and the anti-monopoly Business Competition Supervisory Commission (KPPU) also signed a memorandum of understanding last month, agreeing to exchange information to prevent import cartels from hiking the prices of basic food items.

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