JAKARTA - Coordinating Minister for the Economy Airlangga Hartarto is optimistic that Indonesia's food inflation in 2022 will be controlled amid the war between Russia and Ukraine.
"Fortunately, in three years Indonesia is able to meet its own needs with rice production, so staples are available domestically. So we hope that Indonesia can weather the storm of rising food prices," he said in the Indonesia pavilion webinar at the World Economic Forum (WEF) meeting, quoted from Between, Monday 23 May.
According to Airlangga, Indonesia will not be directly affected by the war between Russia and Ukraine because the value of Indonesia's trade with the two countries is only around US$2 billion a year.
It's just that as much as 40 percent of the total domestic wheat needs are imported from Ukraine.
"That will have an impact on our noodle companies, which at this point can channel the increase in wheat prices to the goodness of noodle prices," he said.
The increase in noodle prices is expected to occur in 2022 even though Indonesian noodle companies have secured a wheat import contract until September 2022.
"Currently the company can channel the increase in the price of wheat to the increase in the price of noodles, so there will be inflation in the price of noodles. In the last three years, the increase in the price of noodles has almost zero," he said.
In addition to food prices, Airlangga said the government also continues to anticipate an increase in energy prices, especially towards the third quarter of 2022 when European countries experience winter and need more energy for their heating.
"We will see oil prices rise. When I met with the ministers of Saudi Arabia, they wanted to increase production but the estimated oil price is still around 100 to 110 US dollars per barrel until the end of the year," he said.
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