Rising Food Prices Make Balikpapan's Inflation Higher Than National

Inflation in May 2024 in Balikpapan City will still be contributed by food. Something similar needs to be anticipated in May 2024.

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Residents buy vegetables at a stall on Mayor Zainal Arifin Street, South Balikpapan District, Balikpapan City, East Kalimantan on Friday (1/9/2023).

BALIKPAPAN, KOMPAS — Inflation Balikpapan City, East Kalimantan, in April 2024 will be at the level of 3.06 percent on an annual basis. This figure is higher than national inflation of 3 percent annually. We need to watch out for inflation in May 2024 due to the decline in capture fisheries production.

The Central Statistics Agency noted that Balikpapan's inflation, which was at 3.06 percent annually, was higher than the previous month, which had a 2.95 percent annual inflation rate.

"The inflation in April is indeed slightly higher than the national inflation, but it is lower than the combined inflation of four cities in East Kalimantan Province, which is 3.21 percent annually," said the Head of Bank Indonesia's Balikpapan Representative Office, Robi Ariadi in a written statement on Sunday (5/5/2024).

The leading drivers of inflation in April 2024 in the city of Balikpapan are transportation, food, beverages, and tobacco. Robi stated that the pressure from the transportation sector occurred due to the high use of air transportation during the period of the Islamic holiday Eid al-Fitr.

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Officials at Sultan Aji Muhammad Sulaiman Sepinggan Airport in Balikpapan, East Kalimantan, wore masks while checking passengers' tickets on Monday (27/1/2020).

As for the highest inflation-contributing commodities in Balikpapan from the food, beverage, and tobacco group, some of them are tomatoes, sweet corn, shallots, watermelons, and garlic.

The increase in tomato prices is due to crop failures in several supplier regions in Java and Sulawesi caused by unpredictable weather. As for the prices of shallots and garlic, they have gone up due to weather factors that cause these commodities to quickly spoil, including during transportation. Similar circumstances are affecting other food commodities.

Also read: Rice Deflation “Drama”

The inflation is held back by several commodities experiencing deflation, including ikan layang, kangkung, cabai rawit, bayam, and kacang panjang. The deflation of ikan layang is caused by an increase in the catch.

As for the decrease in the prices of kangkung, cayenne pepper, spinach, and long beans, it is in line with the increasing harvests. This is happening in a number of local and out-of-town suppliers in Balikpapan.

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Ngadinah (63) is currently picking chili on the coal mining company's land located across from her house in Mulawarman Village, Tenggarong Seberang District, Kutai Kartanegara, East Kalimantan, on Sunday (1/5/2020).

Robi said that Balikpapan's inflation potential might slightly decrease this May. This is in line with the community's demand that returns to normal after Eid al-Fitr. However, he warned of the possibility of an increase in several commodity prices due to several holidays in May 2024.

The condition is predicted to decrease the production of several food commodities, especially from capture fisheries. In addition, inflation is potentially to occur due to the low realization of absorption of unexpected spending funds in efforts to control inflation.

Also read: Annual Food Inflation Still Relatively High Even though the Pressure is Starting to Ease

Robi stated that Bank Indonesia and local governments are part of a team that oversees regional inflation control. Several measures will be taken to maintain the inflation rate within the range of the national inflation target for 2024, which is 2.5 percent plus or minus 1 percent, or 1.5 percent to 3.5 percent.

"We are encouraging the establishment of balancing shops as advised by the East Kalimantan Provincial Government, encouraging the implementation of cheap food promotions and intensive market operations," said Robi.

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Minister of Trade Zulkifli Hasan visited shops selling bulk cooking oil in Balikpapan City, East Kalimantan, Wednesday (20/7/2022).

Head of the Department of Industry, Trade, Cooperatives, and Small and Medium Enterprises of East Kalimantan, Heni Purwaningsih, said that the inflation rate in East Kalimantan, in general, is still high in terms of basic food supplies. This is due to East Kalimantan still being dependent on supplies from other regions.

For example, in terms of rice supply, Kaltim still imports more than 50 percent of its needs from Sulawesi and East Java. Because the government cannot intervene in the market, according to Heni, their party will establish an inflation-balancing store or a kiosk ready to monitor prices and supply (Sigap).

Also read: Controlling Inflation Post-Eid 2024

The store is spread across the cities of Balikpapan, Penajam Paser Utara, and districts of Berau. The selection of these three areas is based on the consumer price index measurement that determines the level of inflation in Kaltim.

"The role of the balancing shop in this scenario is to become an alternative choice for people to get cheaper prices," said Heni.

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The Chairman of the Market Traders Association of Rapak Fatmawati (48) received money from buyers while wearing a face shield and mask at the Rapak Market, in Muara Rapak Village, North Balikpapan District, Balikpapan City, East Kalimantan on Sunday (July 26, 2020).

Fatmawati (50), one of the merchants in Rapak Market, Balikpapan, hopes that the government can control the prices of food commodities from farmers to distributors. As a merchant, she often struggles to manage her finances when she has to buy goods at high prices.

The price of shallots in Balikpapan in March was reportedly around Rp 40,000 per kilogram. It dramatically increased to around Rp 65,000 per kilogram during the fasting month.

"Now it has decreased a bit, but it's still not normal. It's currently around IDR 50,000 per kilogram. The price fluctuates and the traders' profits remain the same," he said when contacted.