Indah Ayu Pujiastuti, Maria Gabrielle Putrinda, Achmat Ikhsan, Tri Listiyarini, Jakarta – Indonesia is holding food prices steady despite a 40-60% surge in plastic packaging costs, while stepping up oversight on crude palm oil (CPO) to keep domestic supply intact.
National Food Agency (Bapanas) said packaging plays a critical role across the agricultural supply chain, but current conditions still allow authorities to maintain existing price benchmarks.
Deputy for Food Availability and Stabilization at Bapanas, I Gusti Ketut Astawa, said the main concern is Indonesia's heavy reliance on imported plastic raw materials from the Middle East, making the domestic food sector vulnerable to global disruptions.
"Overall, based on our latest coordination meeting, a price adjustment is not yet necessary. Given the current conditions in raw materials and transportation, we can still maintain the existing reference prices," Ketut said.
However, Bapanas has begun simulating potential price adjustments amid rising risks of supply shortages. Plastic raw material prices have surged by around 40-60%, while import uncertainty has made some industry players hesitant to execute existing contracts.
"We are running simulations. If production and raw material supply remain smooth, even with a 60% increase, we already have an estimate of the necessary adjustments. Some cases may not require changes to price ceilings, while others may need slight revisions," he said.
Ketut added that further coordination meetings are being prepared to anticipate worst-case scenarios. "This is to ensure we are not caught off guard if a real shortage of plastic raw materials occurs," he said during a regional inflation control meeting on Monday.
On logistics, the government sees limited risk for now. Food transport costs are expected to remain stable as long as subsidized fuel prices do not increase.
"As long as subsidized fuel prices remain unchanged, transportation costs will not rise. We are relatively safe on the logistics side, particularly for trucking," Ketut said.
Retail price ceilings currently apply to staple goods such as rice, sugar, cooking oil, poultry, eggs, beef, chili, shallots, and feed corn.
Plastic price surge hits retailers
The spike in global plastic resin prices has already begun to hit small retailers across the country since early April. Traders in Jakarta and Jepara reported purchase price increases of around 50-60%, driven by disruptions in oil supply linked to escalating conflict in the Middle East.
In Manggarai, South Jakarta, plastic retailer Nani Cahaya said she was caught off guard by the sudden surge.
"I only found out in early April. I was quite shocked when I reopened the shop to restock, purchase prices had jumped by around 50%," Nani said on Monday.
The increase has affected nearly all product categories. Packaged plastic bags rose from Rp 13,000 to Rp 18,000, bulk plastic from Rp 10,000 to Rp 16,000, and cup rolls from Rp 14,000 to around Rp 25,000.
To cope with weakening purchasing power, traders have begun adjusting sales strategies.
"I used to sell mica packaging per pack, now I sell it in units of 10 pieces so it remains affordable for customers," she added.
A similar trend was reported in Jepara, Central Java, where trader Ridwan Alfattah, 39, said prices had been climbing gradually since mid-Ramadan.
"This past week, prices have surged sharply. It's because of the Middle East conflict, imported plastic resin comes from there, and it's derived from oil," Ridwan said. He expects price pressures to persist for at least the next two months.
Industry still growing, but under pressure
The domestic plastic industry is still projected to grow around 4.5% this year, although supply chain disruptions and volatile raw material prices remain key risks.
Secretary General of the Indonesian Olefin, Aromatics and Plastics Association (Inaplas), Fajar Budiono, said the industry continues to face pressure from its heavy reliance on imported naphtha.
"Given the current conditions, there is clearly pressure. But we remain optimistic that the plastic industry can still grow around 4.5%, although growth will not be very strong," Fajar said.
He added that consumer purchasing power will be a decisive factor, particularly for demand in sectors such as food and beverages, packaging, and household goods.
"If purchasing power is maintained, growth could at least match last year. But if it weakens, it will directly affect the industry," he said.
Fajar noted that businesses are becoming more cautious due to fluctuating raw material prices.
"Conditions are very dynamic. Prices can change quickly, so we cannot take excessive risks. The strategy is more medium-term while monitoring market developments," he said.
Prioritizing domestic supply
Home Affairs Minister Tito Karnavian warned that geopolitical tensions present both risks and opportunities, particularly as global food prices rise.
Indonesia, he noted, remains in a strong position with rice stockpiles exceeding 4 million tons, the highest on record, even as other countries struggle with food shortages.
"Geopolitical tensions also create opportunities, but ones we must watch carefully. We must not let rising global demand tempt producers to prioritize exports. Domestic needs must come first despite higher prices abroad," Tito said.
He also called for tighter oversight on crude palm oil (CPO), a key input for cooking oil, as rising global prices could incentivize exports over domestic supply.
"When global CPO prices increase, it becomes more attractive for producers to export rather than serve the domestic market. This requires strict monitoring and regulation from the Trade Ministry," he said.
Tito added that law enforcement, including the Food Task Force, must step up supervision to prevent supply shortages at home.
"This must be closely monitored. We cannot allow higher global prices to encourage irresponsible actors to divert supply overseas, causing domestic shortages and price increases," he said.