Milk price rise theory

Milk price rise theory

From Kompas

A report in Kompas on March 4 dwelled on the rising price of milk. Prior to Lebaran, the paper also carried an analysis which estimated that after Lebaran, the price of milk would increase 100 percent. That estimate is now a fact.

As a housewife with two small children, I believe that there is another aspect that needs more attention in the media's reporting/analysis, namely the link between the profit made by factories/producers and the dependency on imported materials. The analysis might be correct, if the raw material for all milk now available had been bought after the exchange rate of U.S. dollar against the rupiah changed.

Milk products, as well as other foodstuffs, are made within and for a certain period of time. The Lactogen Milk 2, 1 kg size (for example), which I bought in October 1997 for Rp 14,000, December 1997 for Rp 18,000, early February 1998 for Rp 22,000 and late February 1998 for Rp 50,200, all had the same expiry date, namely July 1999. Surely, milk with this expiry date was produced in August 1997, or even earlier, which is to say that the capital used to produce the milk did not, then, have any connection with the value of the rupiah against the dollar.

The market fact now is that after the price reached Rp 50,200 (almost the same as other kinds of milk), milk products scarcely available previously have flooded the market.

We know that these products were produced at the old production costs. If I am correct, then the answer to Kompas' March 4 question on who has played a role in milk price increases is obviously not the producers/factories but the links in the chain connecting the producer to the consumer. I sincerely hope that relevant government agencies will give their response.

MRS. MARYUNI

Bekasi, West Java