Gov`t to Ensure Supply-Demand Balance to Control Food Prices

TEMPO.CO, Jakarta - Trade Minister Thomas Trikasih Lembong said on Wednesday that his priority was to ensure a balance between supply and demand to control food prices without having to curb the current market mechanism.

"The ups and downs in prices are market signals. We do not wish to be inflexible as we try to control prices but would rather decide on the best course of action to restrain prices from rising," he said at a press conference at his office.

He said if the prices were too high, some sort of incentive or market operation could be carried out and "if prices are too low, more stocks would be bought. Therefore, the capacity of warehouses must be assured and checked to stock the supplies.

Regarding the warehouses, the minister said the government is currently preparing to build more of them, and admitted that it would be a time-consuming process.

On reference prices, he said the mechanism to set the floor and ceiling prices would be referred to at a coordination meeting involving all offices concerned.

The prices of rice rose in the recent past. According to Staples Market Monitoring System of the trade ministry, the price of medium-quality rice at the national level was recorded to have reached Rp10,904.55 per kilogram on Tuesday, up from Rp10,748.14 when compared with December end last year.

Based on the data of staples price development of the ministry of trade, rice supply to Jakarta`s Cipinang Rice Market until January 18, 2016 was recorded at 3,186 tons a day.

The supply rose by 17.61 percent, compared to the same period last year, when it was recorded at 2,709 tons.

President Joko Widodo held a meeting with chief economic minister Darmin Nasution, agriculture minister, trade minister and other concerned ministers, to discuss the issue of increase in food prices over the past few weeks.

Cabinet Secretary Pramono Anung said after the meeting, the President urged for immediate action to deal with this issue.

"Certainly, something needs to be corrected with regard to the mechanism, to understand if the hike happened because of the implementation of 10 percent sale tax on foods or other factors," he said.

He said the government wanted the food prices to become stable again.

"The government wants to reduce food prices earnestly," he added.

ANTARA