Food price surge fuels high inflation

Food price surge fuels high inflation

JAKARTA (JP): A recent surge in food prices gave a further push to the country's inflation rate, which reached 1.31 percent in February, as compared to 1.16 percent in January, Minister of Information Harmoko told journalists after a cabinet meeting yesterday.

On a more positive note, the monthly cabinet meeting on the economy reported an 8.7 percent increase in Indonesia's exports to US$40.05 billion in 1994, up from $36.82 billion in 1993.

Harmoko said that February's high inflation had been caused, as in previous years, by a surge in food prices.

"Food prices increased by an average of 3.09 percent in February, while clothing prices rose 1.32 percent," he said, adding that housing prices had increased by only 0.23 percent and that prices of other goods and services had risen by only 0.3 percent last month.

In January, food prices rose 1.65 percent, clothing prices 1.14 percent, housing prices 1.01 percent and the price of other goods and services 0.75 percent.

Among foodstuffs, rice showed volatility in prices because stocks held by the National Logistic Agency (Bulog) reached their lowest level in about 20 years.

"Rice prices rocketed by 16.5 percent in Mataram, West Nusa Tenggara, by 11.5 percent in Jayapura, Irian Jaya, by 10 percent in Jakarta, by 9.5 percent in Bandar Lampung, Lampung, and by seven percent in Ujungpandang, South Sulawesi," Harmoko said.

He said that President Soeharto, who presided over the cabinet meeting, had ordered Bulog to increase its stocks of rice to guarantee adequate supplies on the domestic market.

Last month the President unexpectedly appointed Beddu Amang to replace Ibrahim Hasan as chief of Bulog, leaving the latter to sit as state minister of food without any clear responsibilities.

Bulog, which used to hold more than 1.8 million tons of rice in reserve to support price stability on local markets, reportedly held less than 200,000 tons of rice last month.

Harmoko said the country's rice production in 1995 might exceed the level needed for domestic consumption. Bulog, therefore, should increase purchases of rice from farmers through village cooperatives, he said.

Minister of Agriculture Sjarifudin Baharsjah said recently that Indonesia's rice production, which decreased by four percent to 46.40 million tons of unhusked rice last year, is likely to increase by 1.5 percent this year.

Harmoko said yesterday that the country's money supply had declined slightly to Rp 44.82 trillion (US$20.2 billion) as of the end of January from Rp 45.62 trillion as of last December.

Exports

The minister said that the meeting had also heard that Indonesia enjoyed a trade surplus of $8.18 billion in 1994, with imports reaching $31.87 billion, while its exports were $40.05 billion.

Figures from the Central Bureau of Statistics reveal that 1994's trade surplus was 3.6 percent lower than the $8.49 billion recorded in 1993 because the country's imports grew last year at a faster pace than its exports.

Indonesia's exports in 1993 were $36.82 billion and its imports $28.32 billion.

Harmoko said yesterday that non-oil exports contributed 75.8 percent ($30.36 billion) to last year's total export revenues, while oil and gas accounted for only 24.2 percent ($9.69 billion).

He said that exports of wood products in 1994 reached $5.1 billion (as compared to $5.47 billion in 1993), exports of textiles and textile products $5 billion ($6.16 billion) and exports of rubber goods $1.2 billion ($1.06 billion).

The minister said that in December alone, Indonesia enjoyed a trade surplus of $522.3 million, with exports of $3.77 billion and imports of $3.25 billion.

Yesterday's meeting also reported a 19.7 percent increase in the number of tourist arrivals, up to 279,579 in January over the same period of 1994. (riz)