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Increase in Rice Price Normal: Minister
Irvan Tisnabudi & Arti Ekawati | January 08, 2010

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Trade Minister Mari Elka Pangestu has dismissed concerns about the sharp rise in the price of rice so far this year, saying it was normal for this time of year and that the government had no plans to intervene.

The average retail price of medium-quality rice, the most common variety in the country, has risen 5.5 percent to Rp 6,119 ($0.66) per kilogram since the start of the year.

“An increase in rice prices is normal, especially during the early months of the year because it’s planting season now, not harvest season. So it’s related to seasonal factors,” Mari said on Friday.

She added that the government would not take any action as long as the price did not increase by more than 25 percent in a month.

In such circumstances, ministerial regulations allow the government to sell rice from its stockpile to drive prices lower.

Subagyo, the ministry’s director general of domestic trade, told the Jakarta Globe on Friday that rice prices were affordable and that the current supply remained adequate.

However, Nelly Soekidi, a rice trader at Cipinang rice market in Jakarta, said he was concerned that the recent price rise was already hitting consumers.

He urged the government not to wait until prices have jumped by 25 percent to intervene, saying it would be too late for some poorer families by that time.

A 25 percent increase would imply a price of Rp 6,500 to Rp 7,000 per kilogram, which is “too high for most families in the country,” Nelly told the Jakarta Globe.

At the end of 2009, the State Logistics Agency (Bulog) had a rice stockpile of more than 1.7 million tons, and it intended to buy an additional 3.2 million tons of rice from farmers.