GOVERNMENT TO CURB BASIC NECESSITIES' PRICE HIKES

By Andi Abdussalam

Jakarta, June 15 (Antara) - The government has assured it will curb price hikes of basic necessities within a range of five to 10 percent in facing the fasting month of Ramadan which will begin at the end of June.         "We will prevent price hikes from exceeding a five to 10 percent increase before we enter the fasting month and the Idul Fitri post-fasting Lebaran holidays," Trade Minister Muhammad Lutfi said at the office of the chief economic minister this week.          The Central Bureau of Statistics (BPS) earlier warned that the government should make preparations for the public's food needs in the fasting month to ensure price hikes would not boost inflation.          "Prices can hike and inflation can increase by about one percent during the Lebaran holidays. So, the price of chicken and eggs, for example, should be maintained from now," Sasmito Hadi Wibowo, a deputy for service and goods statistics affairs of the BPS, said.          All Indonesian Traditional Market Traders Association (APPSI) has also assured that the prices of essential commodities will be increased in stages so that consumers will not be affected too seriously. The rate of the increases will be maintained at a tolerated range.          APPSI Secretary General Ngadiran said on Tuesday that traders in the market had raised prices by about two to five percent due to the increase in the logistics burden suffered by companies who had to spend extra money to support their employees facing the fasting month.            "The price hikes are still relatively small and within the tolerable limits. The increase will also be in stages and based on the recommended tolerable limits," he added.          Ngairman said that the Trade Ministry has given traders grouped in the APPSI  a chance to increase prices of basic commodities but it should be within a tolerable limit and be in stages.          He said that since the beginning of this month (June), the prices of essential goods such as chickens, eggs, chili and various other basic necessities have increased evenly by two to five percent across the country.          The price of a small chicken weighing one kilogram increased by Rp2,000 from Rp27,000 to Rp29,000 while that of the bigger on weighing 1.5 to 2 kg,  rose from Rp34,000 to Rp38,000.          Price increases also took place with eggs which rose by Rp1,500 per kg  to Rp15,500 per kg from Rp14,000 per kg. Chili's price averagely increased by about Rp5,000 per kg from Rp11,000 to Rp16,000 per kg.          "Other price increase also happened with shallots from about Rp12,000 -14,000 to Rp18,000-Rp20,000. So was the price of garlic which increased from about Rp9,000 to Rp11,000-Rp12,000 per kg," said Ngadiran.          According to Trade Minister Muhammad Lutfi, the government tried its best to control prices so that price hikes would not caused turmoil.  "We will maintain tolerable rice hikes so that they will not cause 'roller coaster' price fluctuations like what have happened last year. We also assure that stocks are enough," said Lutfi.          He admitted that 30 days in the run-up to the fasting month and in the face of the Idul Fitri holidays, demand for essential goods increase that also boosted prices.          "We can see that 30 days before the fasting month there are commodities whose price increases are high, such as chickens, eggs, shallots and garlic," the trade minister said.          He said that the price of eggs was the highest one or more than 10 percent. Shallot price also exceeded 15 percent.          "The increase in the prices of eggs and chickens is deliberately designed by the ministry of trade and the ministry of agriculture in an effort to prevent businesses in those sectors from falling bankrupt," Lutfi added.          Regarding the price of shallots, the minister said the increase was high but it was still below the reference price of Rp25,700 per kg because it was still at a range of Rp21,000-Rp24,000 per kg.      "But stocks are enough and harvests are now taking place. We are convinced that prices will return to normal before the fasting month."      In the meantime, the Ministry of Agriculture is of the view that price hikes of a number of food commodities in the run-up to the fasting month are still within the reasonable limits.          Director General of Processing and Marketing of Agricultural Products of the Ministry of Agriculture Emilia Harahap said that the price hikes now were still reasonable.          She said that the price increase of the basic necessities was not caused by stock scarcities but by the fact that Muslims were facing fasting month and Lebaran holidays in addition to Christmas and New Year when prices often increased.          "Prices are still reasonable, not yet more than 10 percent," she said.          She said that farmers and breeders in certain periods wanted to enjoy benefit from their business during Lebaran, Christmas and New Year.          In the meantime, the Central Board of Statistics (BPS) warned the government to manage well prices of basic necessities before, during and after the fasting month.          Sasmito Hadi Wibowo said that the prices of basic necessities and processed foods had begun to increase so that inflation last month was recorded at 0.16 percent. For this reason,  the government should make anticipatory steps so that food stocks would remain available and are enough so that prices which could boost inflation would not sharply increase.          He said that the price increases of basic necessities in the run-up to the fasting month and Idul Fitri holidays were boosted by increasing demand for the goods and increasing consumption.          In anticipation of rice stocks, Coordinating Minister for Economic Affairs Chairul Tanjung made inspections to state-owned logistics board Bulog in North Jakarta and the Cipinang Rice Wholesale Market in East Jakarta on Friday.      "The rice stock available with traders in Cipinang Market is about 20 thousand tons and that in the State Logistics Agency (Bulog) warehouses remain at 10 thousand tons. So, the stock remains secure,"   Minister Chairul Tanjung said.          The chief economic minister also asked Bulog to increase rice supplies to the Cipinag rice wholesale market, although rice stocks in the market remain adequate. "Traders in the market asked for additional supplies of medium-class rice because they have enough stock of premium rice. I asked Bulog officials to supply the needed rice in the next one to two days, Chairul Tanjung said at a press conference in the Ministry of Trade office.          The minister also visited the Bulog warehouses in North Jakarta to monitor the availability of rice stocks there. "We also observed the availability of rice stocks in Bulog. There is about 76 thousand tons of rice in its warehouses, and that amount is more than enough, so the stability of rice prices can be maintained," he added.          Bulog President Director Sutarto Alimoeso said his agency was ready to supply medium rice to the Cipinang market. "We are ready to supply rice, no matter how much is required, as we still have enough stock," he added.***2*** (T.A014/O001 ) (T.SYS/A/A. Abdussalam/O. Tamindael) 15-06-2014 21:01: