Russia-Ukraine War Could Make Instant Noodle Price Rise

JAKARTA - Russia's invasion of Ukraine will have an impact on the world's food supply chain, especially for wheat. As is known, Ukraine is included in the top five wheat exporters in the world.

In fact, Indonesia also depends on about 30 percent of imported wheat from Ukraine. This situation will trigger the price of food derived from wheat to increase, one of which is instant noodles.

Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira said that the current situation is quite critical for wheat. Because the price of wheat increased 13 percent in the past month due to Ukraine getting an invasion from Russia.

For your information, the Ministry of Trade noted that Indonesia's imports from Ukraine will reach 1.04 billion US dollars in 2021. Almost all of them are non-oil and gas. Indonesia also depends on about 30 percent of imported wheat from Ukraine.

"So the effect of wheat scarcity or disruption of the wheat supply chain from Ukraine can affect various variables. First, food and beverage producers whose basic ingredients are wheat will take various ways to cut production costs or pass on wheat price increases to consumers. This means instant noodles, the price of bread will be more expensive," he said when contacted by VOI, Friday, February 25.

According to Bhima, in the short or long term, there will be price adjustments at the consumer level related to products derived from processed wheat. This will have an impact on the lower middle-class society.

"The problem is that not all consumers are ready for a price increase. Moreover, a price increase of IDR 500 to IDR 1.000 for instant noodles, of course, many lower middle-class people will be affected," he said.

Therefore, said Bhima, to anticipate the disrupted supply of wheat from Ukraine, food and beverage producers must immediately look for other countries to supply wheat to the country in order to avoid the increase in wheat derivative products.

Apart from Ukraine, according to Bhima, there are several other wheat-producing countries including Australia, the United States, and China.

"In this context also because wheat has become part of the basic needs of people in Indonesia, the role of the government and Bulog is important to assist and facilitate importers to find countries that are ready to supply wheat. The Ministry of Trade is also expected to facilitate these wheat importers to can secure the price," he said.

"This must be done immediately and enter into a long-term contract so that supply and price stability can be guaranteed," he said.