Rice Becomes Contributor to August 2026 Inflation, Amran Identifies the Cause
Rice has once again become one of the commodities exerting pressure on national inflation. The Indonesian Central Bureau of Statistics (BPS) recorded Indonesia’s core inflation in August 2026 at 2.92% year-on-year (yoy), an increase from 2.17% in August 2025.
Ateng Hartono, Deputy for Distribution and Services Statistics at BPS, stated that the core inflation component provided the largest contribution to inflation in August 2026. “Core inflation is 2.92% annually, with this component providing the largest contribution at 1.87%,” Ateng said during a press conference on Tuesday (1/9/2026).
BPS noted several commodities contributing to core inflation in August 2026, including gold jewellery, cooking oil, rice with side dishes, mobile phones, engine oil, and laptops or notebooks. Meanwhile, in the volatile food price component, BPS recorded inflation of 4.06% yoy. Price increases in broiler chicken, rice, bird’s eye chilli, beef, and red chilli were among the drivers.
Overall, Indonesia’s inflation in August 2026 reached 3.19% yoy.
Responding to rice re-emerging as an inflationary pressure, Minister of Agriculture Amran Sulaiman stated that the government is still conducting checks to determine the cause. He assessed that the increase was not caused by issues regarding national rice stocks.
“We checked recently, and because stocks are plentiful, it is not due to stock shortages, as there is plenty of rice. The issue is something we are currently investigating,” Amran said when met at BRMP Padi Sukamandi, Subang, West Java, on Wednesday (2/9/2026).
Amran then highlighted the issue of fortified rice, which he found to be non-compliant with regulations. He mentioned that based on laboratory results, 90% of the fortified rice inspected was problematic.
“According to laboratory results, 90% of what we checked regarding fortified rice was in violation,” he said.
According to him, this issue has the potential to make the price of rice sold to the public much higher than regular rice. “Imagine, it is presented as fortified rice containing vitamins, but it actually contains none, and it is sold at prices ranging from Rp56,000 (per kg) to Rp42,000 (per kg), with an average sale price of Rp22,000 (per kg),” he explained.
Amran assessed that the price difference is very significant. He even linked it to the potential pressure on inflation if such high-priced rice circulates in large quantities.
“Suppose the price of medium-grade rice is Rp13,000 (per kg); the difference with the [fortified rice being sold] at Rp22,000 per kg is substantial. This is fraud,” said Amran.
He believes that the sale of rice at much higher prices is one of the driving factors of inflation. “That adds an extraordinary amount; it should be Rp13,500 (per kg), but they sell it at Rp40,000 (per kg). Do you think that adds to inflation? Is it a contributor? That is the cause,” he concluded.