A rally in egg prices in Indonesia to the highest in at least two years on lower supplies and good demand during the FIFA World Cup has prompted the government to intervene in the market.
The average retail price jumped 21% to about 29,000 rupiah ($2) per kilogram in Jakarta last week from a month earlier, according to data from the central bank-run Center for Information of Strategic Food Price. That’s the highest since at least July 2016, the earliest data compiled by the center. Average egg prices in Indonesia climbed 8% to 27,200 rupiah, the center’s figures show.
Eggs are one of the key and cheapest sources of protein in Southeast Asia’s biggest economy, where millions of people still survive on less than $2 per day. The government wants prices at about 22,000 rupiah per kilogram, compared with 30,000 rupiah in certain markets in Jakarta, Agriculture Minister Amran Sulaiman said on Thursday.
The World Cup helped boost consumption as fans ate instant noodles with eggs while watching football matches at home, Leopold Halim, secretary general of the Indonesian Poultry Farmers Association and Information Center, said in an interview in Jakarta on Thursday. Prices also gained due to lower supply as many farmers sold their old laying-hens because of rising demand for meat, he said.
The government will intervene in the market, starting with supplying 100 tons of eggs in the greater Jakarta area and increasing supply in other cities, Sulaiman said. Eggs will be sold at the ministry’s retail stores at 19,500 rupiah per kilogram, he said.
The price surge, which started ahead of Eid al Fitr in June, when food consumption typically rises, should have come down by now, Yudianto Yosgiarso, chairman of the Indonesia National Poultry Layer Association, said by telephone on Thursday.
The government’s policy to curb corn imports has limited feed meal supply and raised their prices, the Center for Indonesian Policy Studies said in a statement on Wednesday. Indonesia’s corn demand is outpacing production and without adequate supply, meal prices will remain high, it said.
Corn production may climb to 11.9 million tons in 2018-19 from 11.4 million tons a year earlier, according to the U.S. Department of Agriculture. — Bloomberg