Eid al-Fitr amid Inflation Pressures and Geopolitical Crisis

Indonesia faces a recurring cycle each year as Ramadan and Eid al-Fitr approach: a sharp increase in basic commodity prices that drives inflationary pressure. Public demand surges dramatically, whilst distribution systems and supply stability often fail to keep pace adequately.

Data from the Central Bureau of Statistics reveals that during recent Ramadan and Eid periods, the food, beverage, and tobacco categories have been the largest contributors to inflation. The Central Bureau of Statistics recorded annual inflation in February 2026 at 4.76 per cent, a sharp increase from 3.55 per cent in January and exceeding the government’s target range of 2.5 per cent ±1 per cent. On a monthly basis, the trend reversed from deflation of -0.15 per cent to inflation of 0.68 per cent.

These conditions reveal that the national food system still suffers from structural vulnerabilities, particularly in distribution and price stabilisation. If not addressed seriously, price spikes ahead of Eid will not only erode public purchasing power but could widen economic inequality.

As a member of Commission XI of the Indonesian House of Representatives, which oversees finance, banking, and economic system stability, the author views inflation control ahead of Eid as more than merely a technical government agenda. It is a national priority directly affecting public welfare.

When Stocks Exist, Prices Still Rise

Food price increases ahead of Eid are typically caused by two main factors: surging demand and distribution disruptions. Commodities such as rice, cooking oil, sugar, meat, eggs, chillies, and shallots remain the most sensitive indicators.

However, experience from recent years shows that price increases are not always caused by production shortages. In many cases, national stocks are actually sufficient, but inter-regional distribution does not operate optimally.

As a result, consumer-level prices surge due to logistical obstacles, limited transportation capacity, or excessively long supply chains.

In such situations, the state cannot merely be a spectator waiting for market mechanisms to work. The state must intervene to ensure that available food reaches the public at reasonable prices.

Coordination between central government, regional governments, and monetary authorities such as Bank Indonesia is essential to maintain price stability.

Market Operations Are Not a Permanent Solution

To date, the most frequently deployed policy to suppress price increases ahead of Eid has been market operations and subsidised market programmes. These policies are indeed important for tempering price pressure in the short term.

However, the country cannot continue to depend on emergency measures every year.

In the author’s view, inflation control must be built on the foundation of a stronger food system. Indonesia requires serious reform in food commerce, including shortening the distribution chains that have been excessively long.

A paradox often occurs: farmers sell at low prices, yet consumers buy at high prices. This large price differential shows that the greatest profits are enjoyed by intermediaries.

If this structural problem is not addressed, price stability will always remain fragile and market operations will merely become temporary solutions.

The State Must Protect Both Farmers and Consumers

Sound food policy must balance the interests of producers and consumers.

Farmers need fair prices to maintain incentives for production. Conversely, the public needs affordable prices so that basic necessities do not become an excessive burden.

This is where the state has a strategic responsibility. The government must ensure food reserves function effectively. Strong reserves will give the government room to intervene when prices begin to surge.

Additionally, developing food logistics infrastructure—from transportation and storage warehouses to distribution systems—must become a priority.

Without adequate infrastructure, price stability will depend solely on harvest season luck.

Global Geopolitics and the Energy Inflation Threat

This year’s inflation control challenge cannot be separated from the global geopolitical situation. Tensions in the Middle East, particularly conflicts involving Israel—the United States against Iran, create new uncertainty for global economic stability.

This region is one of the world’s primary centres for energy production and distribution. Any escalation of conflict there almost inevitably impacts global oil price increases.

The situation becomes increasingly sensitive when strategic routes such as the Strait of Hormuz experience disruptions and closures for indefinite periods. Approximately 20 per cent of global oil supplies pass through this channel.

For Indonesia, energy comprises an important component of the consumer price index. Therefore, energy price increases will have cascading impacts. In other words, energy affects not only transport costs but also production and distribution costs or logistics expenses.

In an archipelago economy like Indonesia, the impact on food prices can be felt very quickly.

Food Security Is a Matter of Sovereignty

The current global situation should serve as a reminder that food security is not merely an economic issue. It is a matter of national sovereignty.

Countries overly dependent on food imports will always remain vulnerable when global crises occur. Disruptions to international supply chains can directly trigger domestic price surges.

Therefore, Indonesia must strengthen domestic food production capacity. Investment in the agricultural sector must be increased, including in agricultural technology, irrigation systems, and price protection for farmers.

Without agricultural sector transformation, Indonesia will continue to face recurring food inflation cycles every year.