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