March 13, 2020 / 10:08 AM / a month ago

Onion, garlic get the chop in Indonesia as coronavirus hits imports

JAKARTA, March 13 (Reuters) - Restaurants in Indonesia are taking some dishes off the menu after the price of onions soared ten-fold to cost more than beef, while a spike in garlic prices is also affecting staple dishes amid import disruptions from China due to coronavirus. Shipments from China of goods and produce have been hurt in the past few months as a lockdown in some areas and extended holidays to curb the virus outbreak have thrown global supply chains into turmoil. Southeast Asia’s largest economy imports most of its onions and garlic from China and economists already see higher food prices fanning inflation, although they say lower oil prices should keep the headline rate within Bank Indonesia’s range of 2%-4%.

Fast food restaurant chain Carl’s Junior had stopped selling onion rings in the past week, a waiter in a Jakarta restaurant said, after onion prices shot up to 170,000 rupiah ($11.53) a kilogram, ten times the usual price. The chain’s Indonesia franchise-owner PT Mega Mahadana Hadiya did not immediately respond to a request for comment.

Ramen restaurant Hakata Ikkousha displayed a notice in an outlet in central Jakarta saying recipes that use onions had been changed due to scarcity.

Onions and garlic do not grow well in Indonesia and thus the country relies on imports, particularly from China, said Pamitra Wineka, founder of agritech startup Tanihub, which works with over 25,000 farmers. He told Reuters he was hearing from numerous food and restaurant chains who were building months of stocks due to concerns about shortages.

The average price of garlic jumped from about 35,000 rupiah a kilogram last year to over 55,000 rupiah by mid February, although it has since eased to about 45,000 rupiah, according to a government website.

Exacerbating pressures in Indonesia’s food industry, sugar prices have also risen due to a late sugarcane harvest and expected delays in milling.

Retailer Alfamart had recently stopped selling sugar at stores across Indonesia, said corporate affairs director, Solihin, who said sugar producers and wholesalers had been offering prices above the government’s ceiling price.

Alfamart is operated by PT Sumber Alfaria Trijaya.

The trade ministry has issued permits to import 2,000 tonnes of onions and 90,000 tonnes of garlic, and 2.4 million tonnes of raw sugar, to bring prices down. nJ9N2B3005]

Last year, Indonesia imported 111,934 tonnes of onions and 465,344 tonnes of garlic, while shipping in 3.96 million tonnes of raw sugar for households and industries.

“Hopefully the imports will arrive soon,” Trade Minister Agus Suparmanto said this week, adding stocks should be replenished before the start of the Muslim fasting month in late April.

Meanwhile, food and beverage businesses are feeling the pain.

“If prices rise even more, I will have to increase prices of my sambal and empal suwir,” said food seller Glienmourinsie, referring to the Indonesian chilli condiment that uses garlic and shallots, and fried beef. ($1 = 14,740 rupiah) (Additional reporting by Fanny Potkin, Maikel Jefriando and Tabita Diela in Jakarta Editing by Ed Davies)

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