Control the Surge in Rice Price
Reports from several regions indicate that prices continue to increase, with some areas seeing a rise every day.
Workers moving rice from a truck at the Bulog warehouse serving the Jakarta and Banten region in North Jakarta, on Friday (5/1).
JAKARTA, KOMPAS – The prices of rice have begun to increase as supply to the market decreased. Prices should, therefore, be controlled because the main rice harvest will take place only in January.
Reports from several regions indicate that prices continue to increase, with some areas seeing a rise every day.
The government should immediately control prices. Without intervention, the increase may continue, at least until the end of January 2018, when several begin the harvest season.
In Cipinang Rice Market (PIBC) in Jakarta, on Friday (5/1), the price of rice of medium quality ranged between Rp 10,875 (81 US cents) and Rp 12,100 per kilogram, higher than the levels recorded in the same month in 2017 and 2016.
According to Suryono, 59, a rice trader at PIBC market, the price of rice from Indramayu, West Java, has risen to Rp 12,300 per kg from Rp 11,000 per kilogram. The increase of Rp 1,300 per kg within two weeks is relatively high.
Rice supply from Karawang, Indramayu and Cirebon districts, the main suppliers of rice to PIBC, has begun to decline this week. On Thursday, the supply from West Java\'s rice producing areas accounted for only about 20 percent of the daily rice volume of about 3,800 tons in the market. Rice supplied by the State Logistics Agency (Bulog) accounts for 39.48 percent.
Consumers are starting to complain about the rapid increase in rice prices.
In East Java, the rice price of rice has also increased to Rp 12,500 per kg from Rp 11,000 per kg early last month. Price increases in Genteng Market and Wonokromo Market, the main rice markets in Surabaya, occur almost every day.
"The average price increase is Rp 100 per kg per day," said Rachman, 45, a trader in Wonokromo Market.
Consumers are starting to complain about the rapid increase in rice prices. "Rice is getting more expensive," said Peni, 53, a resident of Medokan, Surabaya.
In Legi Market, Surakarta, Central Java, rice of a medium quality now costs Rp 12,500 per kg, rising from Rp 10,500 per kg in the second week of December. "This is the most expensive it has been in years," said Ali, a rice trader at Legi Market.
At Pasar Kosambi Market, Bandung, West Java, the price of IR 64-II rice rose from Rp 10,800 to Rp 11,000 per kg. "The price is higher than Rp 10,400 per kg at the beginning of last year," said Fahri, 32, a trader at Kosambi Market.
Rice stock available at the Bulog warehouse for Jakarta and Banten region in North Jakarta, on Friday (5/1).
Predictable
The increase in rice prices can be anticipated because several rice mills have faced difficulties obtaining raw materials due to the decline in supply from farmers.
Small and medium-scale rice mills in Karangsinom, Indramayu district, West Java, for example, have had difficulty in getting rice of affordable prices during the last three months after the end of the gadu harvest, which took place September and October.
Dasmul, 57, has even closed his rice mill in Karangsinom. "The price of dry unhusked rice is Rp 7,700 per kg. I cannot afford it. So, the mill is closed," Dasmul said.
The price is far above the government\'s purchasing price, which was raised by 10 percent to Rp 5,115 per kg. The supply of rice may be normal only after the main harvest season in February, which has been delayed for two months. The beginning of the 2017/2018 planting season was delayed from October to December due to irrigation problems.
Minister of Agriculture Andi Amran Sulaiman optimistic that supply will increase as the rice harvest will start at the end of January.
The director general of food crops at the Ministry of Agriculture, Sumardjo Gatot Irianto, said rice planting in October-December only covered 4.82 million hectares, a decline by 413,727 hectares from 5.24 million hectares during the same period in 2016.
Sufficient
Minister of Agriculture Andi Amran Sulaiman said that Bulog\'s rice stock of 1 million tons by the end of 2017 would be enough to meet demand. He is optimistic that supply will increase as the rice harvest will start at the end of January. "There was a stock of 1 million tons at the end of the year and the harvest will start soon," he said.
Especially for Jakarta and its surroundings, the government through Bulog has supplied about 30,000 tons of rice as part of a program carried out since October 2017. However, it is relatively small compared to the amount of rice taken out of the PIBC market, which reaches 3,000 tons per day. Therefore, it has little impact on price reduction.
The director of procurement of Perum Bulog, Andrianto Wahyu Adi, said that achieving the procurement target of 3.7 million tons was quite challenging. However, internally, Bulog is targeting to procure 2.7 million tons, mostly for “commercial” markets. Bulog\'s procurement for the distribution of subsidized rice for a poor people (non-commercial) declined last year. With regards to current price developments, Bulog said it was ready to carry out market operations to control rice prices. Some of the rice stock has been distributed to several areas in Indonesia.
This month, the government would focus on market operations to halt the price increase.
The director general of domestic trade at the Trade Ministry, Tjahya Widayanti, said that this month, the government would focus on market operations to halt the price increase. "The increase is due to a declining supply and weather problems that impede distribution," Tjahya said.
Dwi Andreas Santosa, a professor at the Bogor Agricultural University (IPB), said rice production in 2017 was partly damaged by brown planthoppers. Dwi estimates that realized production in 2017 was lower than in 2016.
"The main harvest will indeed take place in March, but it will only increase rice supply and distribution in April, so that in April, the price is expected to start declining," he said.
Trade Minister Enggartiasto Lukita said that companies involved in food trading should register their warehouses and regularly report their food stock. "Please keep rice in the warehouse. However, if they keep the rice when the price is high, it means they are hoarding and we will act against it," he said.
(MKN/HEN/DD07/ETA/SYA/RWN/IKI/TAM/DIT/GRE)
