Indonesia

Indonesia - Food Price Bulletin, April 2022

Attachments

Special Focus: Palm Oil

Key Highlights

  • Global food prices reached record-highs in March as a result of the Russian-Ukrainian conflict. The FAO Food Price Index (FFPI) jumped by nearly 13% from February, the highest level since 1990. These increases mainly reflect soaring prices of vegetable oils, cereals, and meats as well as significant rises for sugar and dairy.

  • Russia and Ukraine provide approximately half of global cereal exports, including 29% of the world’s wheat supply. Together, they also provide roughly 72% of global sunflower oil exports. The conflict has already severely hampered global supply chains, impacting the prices of these commodities. On 22 April, the international price of wheat reached USD 456 per tonne, up from USD 342 recorded one week before the start of the conflict. Moreover, the FAO Vegetable Oil Price Index rose 23.2 percent, primarily driven by higher quotations for sunflower oil.

  • Indonesia is fully dependent on wheat imports and acquires about one quarter of its wheat supply from Ukraine. Despite the Russian-Ukrainian conflict, domestic supplies have been maintained and wheat flour prices have not recorded a significant increase (only 1.7% between February and March). Global supply disruptions should be continually monitored as this may affect local wheat prices in the medium to long-term.

  • With regards to Indonesia’s 10 strategic food commodities, national stocks at the end of March were sufficient to meet domestic consumption needs. However, the stock duration for each commodity varied at both national and sub-national levels. Low stocks (availability for less than seven days) of chilli, bird’s eye chilli, maize and shallots in certain provinces are likely to contribute to increased prices of these commodities, especially with the approaching Eid Al-Fitr celebrations.

  • In March 2022, the monthly inflation reached 0.6%, the highest since the start of the COVID-19 pandemic in 2020. Furthermore, the food commodities inflation stood at 1.4%, which was significantly higher compared to March 2021 (0.08%) and March 2020 (0.01%). The increasing prices of red chilli, cooking oil and egg were the main drivers of inflation. Cooking oil recorded an all-time high increase of 42% compared to March 2021, and 10% compared to February 2022.