Food prices could rise by 10%: Minister

Food prices could rise by 10%: Minister

Food prices are estimated to soar by over 10 percent once the
government increases fuel prices early next month, which would
eventually see transportation and production costs increase, a
minister says.

Minister of Trade Mari Elka Pangestu said on Wednesday that
the figure was a preliminary calculation based on the effects of
the fuel price increase of 29 percent on average in March, which
had driven food prices up by between 5 and 10 percent.

"The rise in food prices will depend on the percentage of the
upcoming fuel price increase. I think the rise (in food prices)
will be 10 percent at least," she said after a Cabinet meeting
via video conference on Wednesday with President Susilo Bambang
Yudhoyono.

Mari said fuel prices could go up in early October, before the
start of the Ramadhan fasting month, during which demand for
provisions is higher.
She said Susilo had instructed her to carefully supervise the
distribution of food in the coming weeks.

"An increase in food prices caused by the fuel price increase
is tolerable. We are more concerned about the stability of prices
and ensuring that there will be no stockpiling of food," she
said.

Based on previous experience, food becomes more costly in the
days leading up to the government's announcement of a fuel price
increase but after the announcement the prices are higher still.
-- JP