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)