April 29, 2025 | 09:32 pm
TEMPO.CO, Jakarta - Arief Prasetyo Adi, Head of the National Food Authority (Bapanas), has requested the state-owned food holding company, ID Food, to import garlic from China in a bid to secure the government's reserves of horticultural products.
"We have requested ID Food to prepare. If I'm not mistaken, the last request we made was for around 15,000 or 25,000 tons to ensure the availability of stockpiles," Arief stated when met at his office in Jakarta on Tuesday, April 29, 2025.
Arief emphasized that entrusting garlic imports to ID Food is a necessary measure to stabilize fluctuating prices. According to data from Info Pangan Jakarta (Jakarta Food Information Center), the price of garlic has escalated to Rp49,000 per kilogram, exceeding the benchmark price of Rp38,000 per kilogram.
The procurement of garlic stockpiles, according to Arief, is also mandated by Presidential Regulation Number 125 of 2022 concerning Government Food Reserves. This regulation also governs the acquisition of food reserves for staple commodities such as rice, meat, sugar, and corn.
"I also conveyed in the forum that state-owned enterprises indeed have a function as stabilizers," remarked the former CEO of PT Rajawali Nusantara Indonesia.
Regarding the unusual spike in garlic prices, an investigation by Tempo in mid-March revealed a potential underlying cause. Five importers who did not receive garlic import allocations recounted that importers holding Recommendations for Horticultural Product Imports (RIPH) and Import Approval Letters (SPI) were deliberately delaying import realizations to avoid market operations aimed at price stabilization.
This alleged tactic stems from the fact that their procurement price from China reached US$1,445 per ton. With an exchange rate of Rp16,400 per US dollar, the cost of garlic from China is Rp23,698,000 per ton or only Rp23,698 per kilogram. The price had even dropped to US$1,140 per ton.
Factoring in transportation costs, the total expenses for importers to get the garlic to their warehouses amounted to Rp25,198 per kilogram. This resulted in a selling price at the importer level of Rp33,500 per kilogram, which is higher than the government's set price for market operations of Rp32,000 per kilogram.
There are also suspicions that importers with allocations deliberately withheld stock to inflate prices during the Eid al-Fitr period. Importers who did not receive allocations reported that the current price of garlic in China is relatively high due to limited production. However, they anticipate abundant production in May and June, leading to lower prices. This situation allegedly creates an opportunity for importers to secure significant profit margins.
Furthermore, according to the five long-time importers, the spike in garlic prices is also attributed to established importers who, on average, did not receive import quotas having to purchase these quotas from importers holding RIPH and SPI. This acquisition involves an additional fee of Rp7,000 to Rp8,000 per kilogram. To avoid losses, these entrepreneurs subsequently raise the selling price of garlic in the market.
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