Andi Haswidi, Jakarta – After four months of improvement, consumer confidence fell in June amid concerns about cooking oil, milk and other food-product prices, a survey reveals.

The monthly consumer confidence survey by Bank Indonesia says that the consumer confidence index fall from 98.5 in May to 95.8 in June as fewer people were optimistic about current economic conditions and economic expectations.

The economic conditions index was down from 87.7 to 84.9, while the consumer expectations index fell from 109.4 to 106.6.

The price of cooking oil has surged over the last few months, and now costs more than Rp 8,000 (about 90 US cents) per kilogram. Cooking oil prices have been rising in line with higher prices for crude palm oil (CPO) – the commodity's main raw material – on the world market.

The government has been trying to bring cooking oil prices under control through market intervention operations conducted in collaboration with producers as part of which cooking oil is sold at below market prices. In addition, the export duty on CPO has been increased.

Another factor undermining consumer confidence in June has been the surge in powdered milk prices from between Rp 25,000 and Rp 27,000 per kilogram in January to about Rp 51,000 this month.

The global surge in milk prices has been triggered largely by droughts in a number of major producers, as well as high demand from China and India.

The BI survey concludes that of the 4,679 people surveyed, about 26.4 percent – down from 28.9 percent in May – expects the economic situation in the next six months to improve, while 21.8 percent – up from 21.1 percent in May – expects the economy to worsen.

The other 51.17 percent expects the situation to remain the same.

The survey concluded that consumers in only seven out of the 18 cities surveyed could be categorized as "optimistic", with the most optimistic consumers being found in Makassar, South Sulawesi, while those in Padang, West Sumatra, were the most pessimistic on 79.1.

The economic conditions index, the survey says, also fell due to a slight decline in optimism over income growth, which fell from 133.4 to 128.5. Despite the fall, BI said that respondents were generally optimistic about their incomes over the next six months.

Of all respondents, about 37.17 percent expects their incomes to increase – a decline from the 40.88 percent recorded in May, while 8.64 percent expects otherwise – a little worse than the 7.48 percent in May.

About 54.18 percent expects their incomes to remain relatively stable, as compared to 51.65 percent in May.

As for prices, consumers expect further big increases over the next three and six-month periods.