Indonesian govt feels the heat as food prices soar

Indonesian govt feels the heat as food prices soar

JAKARTA - Prices of chilli padi, the fiery-hot bird's eye chilli, and key food items have shot up this month, and got many Indonesians hot under the collar.

Chilli padi, known here as cabai rawit, costs as much as 100,000 rupiah (S$13) a kg in some markets, having doubled in price over the past month. That price could buy a kilo of beef.

The price of beef, already at record highs, has jumped by at least 25 per cent during this period.

Food price inflation, common during Ramadan, has always been a serious concern for the authorities. But this year, the record spike in prices could stoke dissatisfaction with the government ahead of the elections next year.

Bank Indonesia last week said it expects inflation to hit 7.2 per cent to 7.8 per cent this year.

Several factors were behind the recent price spikes, including an increase in the price of subsidised fuel in June and crop failures because of the extreme weather.

Also a factor were restrictions on certain foods in terms of the quantities that could be imported, which were aimed at protecting local produce and driving self-sufficiency.

The restrictions on beef were relaxed only recently to help bring prices down.

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