IPB University Lecturer Reveals Causes of Chili Price Increase in Ramadan
Entering the first week of Ramadan, chili prices in a number of regions have reportedly risen sharply. In Mataram (27/2) and Manado (2/3), the price has even reached Rp120.000 per kilogram.
According to Dr Dwi Rachmina, a lecturer at the Department of Agribusiness at IPB University, the increase in chili prices is influenced by a combination of factors, one of which is high demand.
“There are several main factors for the increase in chili prices ahead of Ramadan. First, there is an increase in demand. Ahead of Ramadan, people’s consumption of chili increases significantly because chili is the main ingredient in many Indonesian dishes,” said Dr Dwi.
Secondly, extreme weather such as high rainfall or long drought can affect chili production. Chili plants are sensitive to weather conditions, and excessive rainfall. As a result, chili supply decreases, while demand increases, which contributes to price hikes.
“Third, delivery delays or lack of supply in certain areas, can lead to scarcity and price increases. The long and complex chili distribution chain, as well as high logistics costs, can lead to price disparities between producers and consumers,” she said.
Dr Dwi admitted that the influence of season and weather conditions as well as the length and inefficiency of the chili supply chain are factors that cause this price increase phenomenon to recur every year. In addition, post-harvest technology is still very limited.
She also stated that the increase in chili prices has an impact on inflation stability. “Stable chili prices are our hope and can affect inflation stability because chili prices are a contributor to inflation,” she said.
Furthermore, the contribution of chili prices to inflation varies depending on market conditions, seasons, and price fluctuations that occur. Chili can contribute 0,15-0,20 percent of monthly inflation.
“In the context of food inflation, chili is often the main contributor, contributing 20-30 percent of total food inflation,” she explained.
For consumers, Dr Dwi explained, the increase in chili prices causes household spending on food to increase. “This affects consumers from low-income groups, whose proportion of expenditure on food is greater than that of middle- and high-income groups,” she said.
The increase in chili prices, she continued, also affects the food industry and traders such as food stalls, restaurants, and street food sellers. Inevitably, traders will reduce the portion of chili, if not increase the selling price. “This can reduce their competitiveness and profits,” said Dr Dwi.
“Therefore, chili price stabilization is very important to control inflation, especially in countries like Indonesia where chili is the main spice in daily consumption,” she concluded.
According to her, maintaining chili price stability requires a comprehensive and integrated strategy from upstream (production) to downstream, namely farmers, farmer institutions, traders or the private sector, including the government.
“To overcome this problem, a long-term strategy is needed such as increasing production, infrastructure development, access to market information, and strengthening the distribution chain,” she concluded. (Lp) (IAAS/LAN)
