Food prices may rise 1%-5%: Mari<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Assuming that transportation costs rise by no more than 10
\npercent, the recent fuel price hike will only lead to an average
\nincrease in basic food prices of 5 percent, according to Minister
\nof Trade Mari Elka Pangestu.<\/p>\n
Speaking during a routine market inspection on Saturday, Mari
\nsaid the forecast was in line with calculations made by the
\nIndonesian Retailers Association (Aprindo) and the Indonesian
\nFood and Beverages Association (Gapmi).<\/p>\n
\"As calculated by Aprindo and Gapmi, the rise in food prices
\nas a result from the fuel price hike is predicted to hover from 1
\nto 5 percent.<\/p>\n
\"This is based on the assumption that transportation costs go
\nup by no more than 10 percent,\" Mari said, citing an assessment
\nmade by the ministry of transportation.<\/p>\n
Effective March 1, the government has hiked domestic fuel
\nprices by an average of 29 percent so as to reduce the costly
\nfuel subsidy and in part set aside more funding allocations for
\npublic services.<\/p>\n
Critics say transportation costs will be the hardest hit by
\nthe policy, pushing production costs up, and will in turn
\nincrease the prices of basic foods.<\/p>\n
However, according to Mari, with fuel costs comprising about
\n20 percent of total transportation costs -- according to the
\ncalculations from the ministry of transportation, \"The 29 percent
\nhike in fuel prices would result in an increase of between 7.5 to
\n10 percent in transportation costs.\"<\/p>\n
Acknowledging that the prices of basic foods -- notably in
\ntraditional markets -- have been fluctuating more she had
\npredicted, Mari said that factors other than fuel prices had come
\ninto play.<\/p>\n
\"We've been monitoring prices on the market and finding that
\nthe increase was indeed directly related to the fuel price hike,
\nbut there are also price differences due to other factors,\" said
\nMari.<\/p>\n
She said, as an example that the fluctuating prices of onions
\nand rice in traditional markets had been the result of supply
\nproblems due to floods and a late rice harvest, respectively.<\/p>\n
\"The most important thing now is to ensure that basic foods
\nare readily available, she said.\" (004)<\/p>",
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