"We would implement the president`s directives about market operations because our stock in the National Logistics Agency (Bulog) is quite large, until the next grand harvest so that the prices would decline," coordinating minister for economic affairs Hatta Rajasa said at the presidential office here on Thursday after attending a cabinet meeting on food prices.
He said to keep the stock remain stable the government had imported 1.5 million tons of rice for anticipatory measure.
"In other words Bulog`s stock is constant, good and safe," he said, adding that imports were needed due to a drop in the quality of rice as a result of extreme weather.
On the increasing national prices of food Hatta said it was all caused by global food price hike. He said the world`s corn production only rose 1.01 percent while consumption was up 2.5 percent causing reduction in stock by minus 11.7 percent.
Production of wheat and rice meanwhile dropped 5.2 percent and 2.7 percent respectively while consumption jumped 2.5 percent and 3.5 percent making the stock to decline minus 10 percent and 0.52 percent.
"This is the world`s condition. It has happened because of a weather anomaly and rising consumption due to increasing population and the hike in the number of middle-classs whose consumption is higher," he said.
To overcome the price hike, Hatta said, the government had secured domestic supply through imports and market operations to help the low income group. The government, he said, would intervene in areas needing help.
"But first we will manage the impact of the shock, slowly lower the price and deal with the price hike through fiscal and trade order," he said.
He said it would all be done by increasing cooperation with the business community like what the government had done when facing crisis in 2007 and 2009 by among others by bearing the cost of rice import duty and cooking oil value added tax.(*)
Editor: Jafar M Sidik
Copyright © ANTARA 2011
