Anticipating Yearend Price Fluctuation

The prices of unhusked rice and rice has continued to increase over the past five months. The government needs to anticipate fluctuating rice prices from the end of 2019 until early 2020.

Kompas

Paddy fields at Jatisari district, Karawang regency, West Java, are ready for harvest on Tuesday (1/10/2019). Farmers in the district are counting the days for their harvest.

JAKARTA, KOMPAS – The prices of unhusked rice and rice has continued to increase over the past five months. In addition to the decrease in supply from the end of the harvest season, the price increase is also caused by the reduced area of rice paddies that can be harvested due to drought. The government needs to anticipate fluctuating rice prices from the end of 2019 until early 2020.

Statistics Indonesia (BPS) recorded 0.27 percent deflation in September, mainly contributed by a decline in the food price index. However, a number of commodities showed increased prices that contributed to inflation, which included rice, Chinese mustard and spinach.

The price of medium-quality rice at the production level continued to increase from Rp 9,143 per kilogram in May 2019 to Rp 9,301 per kilogram in September, while the price of unhusked paddy rice (GKP) increased from Rp 4,445 per kilogram g to Rp 5,201 per kilogram in the same period.

Bogor Agricultural University (IPB) agriculture professor Dwi Andreas Santosa said on Tuesday (1/10/2019) that the increase in the farm gate price of unhusked rice indicated a disruption to domestic rice production, which had occurred due to the relatively long dry season this year, aside from the reduced area of paddy fields.

The government needs to watch for fluctuations in the price of rice from December 2019 to February 2020, the symptoms for which would begin to emerge in November.

The government needs to watch for fluctuations in the price of rice from December 2019 to February 2020, the symptoms for which would begin to emerge in November.

"I estimate that the price of GKP in rice producing areas can reach Rp 5,500 per kilogram, while the price of medium-quality rice at the consumer level will reach above Rp 12,000 per kilogram," said Andreas.

The price of unhusked rice is relatively high in a number of rice producing regions such as Cirebon, Indramayu and Karawang. For example in Cirebon, the price of dry milled rice (GKG) ranges from Rp 5,100 to Rp 6,000 per kilogram, and in Indramayu, it is Rp 6,100 per kilogram. The price of GKP is around Rp 5,000 per kilogram, much higher than the government\'s reference price of Rp 3,700 per kilogram.

Ma\'muri, 39, a farmer in Kapetakan, Cirebon, hopes that the price of unhusked rice will not fall like it did in March, during the panen rendeng (primary harvest season), when the farm gate price of GKP was Rp 3,400 per kilogram.

According to Iday, 34, a farmer in Sukapura, Rawamerta district, the price of GKP in Karawang increased from Rp 4,200 per kilogram at the end of May to the current price of Rp 5,600 per kilogram. However, the price increases were in line with high pesticide expenditures.

KOMPAS/ABDULLAH FIKRI ASHRI

Sutarno, 53, shows his paddy fields in Purbawinangun village, Plumbon district, Cirebon regency, West Java, Tuesday (1/10/2019). Farmers hoped that the price of unhusked rice at the farmer level remains high, namely Rp 5,700 per kilogram, to enable them enjoy good profits.

Sufficient

According to BPS head Suhariyanto, the increase in the farm gate price and production-level price of unhusked rice was an indication of a seasonal decline in the harvest yield. With the government’s rice stock, the price of rice should remain stable until the yearend. "There should be no surge in the price of rice," he said.

State Logistics Agency (Bulog) president director Budi Waseso said that the agency still had 2.4 million tons in state rice reserves. This was considered a safe amount, because the minimum buffer stock was set at around 1.5 million tons.

However, Bulog would not be able to meet the government\'s 2019 target of procuring 1.8 million tons in rice reserves, mainly due to the relatively high market price for paddy/milled rice, which exceeded the government\'s reference price. The estimated domestic absorption of paddy/milled rice this year was 1.2 million-1.3 million tons, primarily due to the relatively high market price.

As with the farm gate price and production-level price, the market price for rice has also increased in recent months.

KOMPAS/M PASCHALIA JUDITH J

State Logistics Agency (Bulog) president director Budi Waseso

The Center of Strategic Food Price Information noted that the consumer-level price of medium-quality rice increased from Rp 11,550-Rp 11,800 per kilogram in early September to Rp 11,650-Rp 11,850 per kilogram at the end of the month.

At the Cipinang Central Rice Market in East Jakarta, the price of medium-quality rice increased from Rp 8,825-Rp 10,575 per kilogram to Rp 9,025-Rp 10,600 per kilogram during the same period.

(IKI/MEL/JUD)