Food Commodity Procurement Needed to Curb Inflation: Minister

Jakarta, June 19 (Antara) -- Procurement of food stuff in the ongoing fasting month of Ramadan is crucial to maintain a low inflation rate in the June-July period, Chief Economic Minister Sofyan Djalil said. "Procurement should be done domestically at a slightly higher price, as long as the goods are available. If the goods are unavailable, the option to import should be discussed in a meeting," the coordinating minister for economic affairs stated here on Friday. Djalil added that the government had considered various risks that could threaten the availability of food commodities and disturb food crop harvests, including the possible impacts of El Nino. However, the minister pointed out that food stocks in various regions were still believed to be adequate in the face of the Eid al Fitr festivities that follow Ramadan. "There is no problem now, but after the Eid holidays, we will see again. What is important is that national rice stock still amounts to 1.5 million tons. This must be available till the end of the year," he remarked. Earlier, Bank Indonesia (BI) had predicted that the country will continue to face inflationary pressures in June, like it did in May when it was fueled by fluctuations in food prices due to shortage of stocks. The Central Bureau of Statistics (BPS) noted that Indonesia's inflation was 0.5 percent in May, the highest monthly inflation in 7 years. Rise in the prices of food products contributed to the inflation in May, BPS Chief Suryamin affirmed here on Monday. The inflation in May brought the country's inflation to 0.42 percent in the first five months of the year. Year-on-year (YOY), inflation was 7.15 percent. The core inflation in May was 0.25 percent, and YOY, it was 5.04 percent, Suryamin revealed. The main contributors to the inflation were food products such as red onion, garlic, chili, fresh fish and chicken meat, and electricity. In the face of possible inflationary pressures, the central bank and the government are set to cooperate to bring down the high inflation rate during the holy month of Ramadan. "To reduce and control inflation during Ramadan, we need to coordinate with the government," BI Deputy Governor Erwin Rijanto said on Wednesday. Rijanto believes that the system of logistics distribution was a major obstacle that caused a rise in the prices of goods in a number of regions. "Distribution is crucial. We have to speak with the government about the faults in the logistics distribution system," he added. BI received inflation numbers from their regional offices throughout Indonesia, he revealed. In addition, the news about the surge in the prices of goods in regions was also sent by regional inflation control teams (TPID). With such coordination, Rijanto remarked, the central bank of Indonesia and the government can jointly encourage the development of the real sector, which is aimed at controlling the increase in the prices of goods ahead of the fasting month of Ramadan.