Rice Prices Don't Drop, Here Are 3 Main Causes

JAKARTA - Residents' complaints about the continued high price of rice are increasingly widespread in a number of areas. Although the government through the Minister of Trade Budi Santoso claims prices have begun to fall thanks to the operation of the Supply Stabilization market and Food Prices (SPHP), the data shows the opposite.

Referring to the Ministry of Trade's Market Monitoring and Basic Needs System (SP2KP) processed by the Central Statistics Agency (BPS), the price of medium and premium rice in the second week of August 2025 was actually higher than the previous month.

In Zone 1, medium rice reaches IDR 14,012 per kilogram and premium IDR 15,435 per kg, up from July 2025, which IDR 13,853 per kg and IDR 15,310 per kg, respectively. Similar conditions occur in Zone 2 and 3, even all of which exceed the highest retail price (HET).

"The claim that the price of rice has fallen does not match reality. The second week of August 2025, the national average price of medium and premium rice in Zone 1 is Rp. 14,012 per kg and Rp. 15,435 per kg, respectively. This price is higher than the price in July 2025," said Agricultural Observer from the Indonesian Political Economic Association (AEPI), Khudori in a written statement received by VOI, Friday, August 22.

"In Zone 2 and 3 the situation is Sami mawon (equal). The national average price of medium and premium rice in zone 2 in the second week of August 2025 is IDR 14,875 per kg and IDR 16,625 per kg, respectively. The price is higher than the price in July 2025," he continued.

Khudori assessed that there are three main factors that cause rice prices to fail. First, Bulog's SPHP market operation has not been effective. Since it was rolled out again from July 14 to August 19, 2025, Bulog has only distributed 44,813 tons or an average of 1,211 tons per day. This number is considered too small to contain the rate of price increase in the market.

Second, Bulog still continues to absorb grain/rice from farmers through a maklun scheme. This practice makes the competition to buy unhulled rice even fierce so that the price of unhulled rice soars to Rp. 8,000 per kg. As a result, the price of rice in the market has also increased.

Third, the surplus of rice production decreases with the entry of the gadu season (June'September). The rice surplus in July, August, and September 2025 was only around 0.22' 0.56 million tons, far below the March and April surplus which reached 2.64 million tons, respectively.

"These three factors are interrelated and strengthen each other so that the price of grain remains high, which automatically makes it difficult for rice prices to fall," he said.

He advised the government to take three corrective steps, namely to relax the SPHP distribution scheme accompanied by strict supervision, to stop the absorption of BULOG through maklun and focus on distributing 4 million tons of rice in warehouses, and reduce the role of the Food Task Force as a economic police' which actually creates fear among business actors.

In addition, the government needs to immediately adjust the HET of rice so that it is balanced with the increase in the purchase price of the government (HPP) of unhulled rice, which is now Rp. 6,500 per kg.

Government Claims Rice Prices Are Starting To Drop

Previously, Minister of Agriculture (Mentan) Andi Amran Sulaiman said rice prices in a number of areas had begun to fall. The decrease in rice prices is based on data from Bulog and the National Food Agency (Bapanas).

Amran is optimistic that this positive trend will continue so that the goal of realizing food self-sufficiency can be achieved in the near future. Based on data from the Bapanas food price panel as of August 20, 2025, the prices of medium and premium rice will gradually decline nationally.

According to reports, the decline in rice prices occurred in 13 provinces, including Aceh, North Sumatra, South Sumatra, Lampung, DKI Jakarta, West Java, Central Java, DI Yogyakarta, East Java, Bali, West Nusa Tenggara, West Kalimantan, and South Sulawesi.