Air Freight News

Garlic prices jump in Indonesia on worries about Chinese exports

Indonesia is grappling with surging garlic prices as the fast-spreading coronavirus spurs fears over supply disruptions in China.

That’s because China accounts for about 80% of the world’s garlic supply, while Indonesia counts on the Asian country for 90% of its imports. Concerns that coronavirus could lead to a halt in those shipments has spurred an almost 70% surge in garlic prices in the capital Jakarta in just one week.

“Coronavirus has influenced market sentiment, causing sellers to abruptly lift prices,” said Abdullah Mansuri, head of the Indonesian Market Traders Association. “This occurred because we relied heavily on imports from a single country.”

Garlic is one of many commodities that are rattled by the crisis in China as it saps demand for everything from copper to jet fuel. And while garlic may not be high on the radar of the world’s financial markets, its use in Indonesian food is ubiquitous with everything from sambal to nasi goreng relying on the pungent bulb, meaning it could spur inflation like garlic, shallots and chili did last year.

Indonesia, the world’s top buyer, imports over 500,000 tons of garlic every year and is likely to be hit hardest by the potential supply risks from China. Retail prices have more than doubled in some markets to about 80,000 rupiah per kilogram ($5,839 a ton) in the past weeks, said the Indonesian Market Traders Association.

As a means to stabilize prices, the country has released 20 tons of garlic to be sold at 30,000 rupiah per kilogram, the agriculture ministry said. On Monday, a recommendation was made by the government to import 103,000 tons of garlic to cool off local prices, mostly from China, Director General of Horticulture Priharso Setyanto said.

The market traders association urged the government to quickly issue permits to import from other nations such as Thailand and Laos, Mansuri said. Indonesia’s Presidential Chief of Staff Moeldoko said the the country has plans to issue garlic import permits this week to halt a further hike in prices.

Mansuri said Indonesia only has a month’s worth of garlic stockpiled, and that local output only accounts for less than 10% of annual demand. Imports from China are still allowed, and the government plans to continue intervening in the market by adding supplies until retail prices drop to 50,000 rupiah.

China produced more than 22 million tons of garlic in 2018, making up about 80% of the world’s garlic, according to data from Food and Agriculture Organization of the United Nations.

Bloomberg
Bloomberg

{afn_job_title}

© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

Similar Stories

https://www.ajot.com/images/uploads/article/methamphetamine.jpg
CBP intercepts over $30 million in methamphetamine at the Pharr International Bridge
View Article
https://www.ajot.com/images/uploads/article/DREW_%28new%29.JPG
WTCA Forum 2024 in New York underscores importance of international collaboration
View Article
ACD celebrates 2024 Annual Meeting in La Quinta, California

Today, the Alliance for Chemical Distribution (ACD) welcomed 666 members and industry leaders for its highly anticipated 2024 Annual Meeting held in La Quinta, California.

View Article
Holiday spending still on track for steady growth amid ‘mixed signals’ in recent jobs and GDP data

The National Retail Federation still expects steady sales growth for the winter holiday season despite contradictions in the latest economic indicators, NRF Chief Economist Jack Kleinhenz said today.

View Article
Trump Presidency will reignite US-China trade war and threaten a spike in ocean container shipping markets / Xeneta

Donald Trump’s victory in the US Presidential Election is ‘a step in the wrong direction’ for international trade as importers fear another spike in ocean container shipping freight rates.

View Article
https://www.ajot.com/images/uploads/article/Census_Bureau.png
U.S. international trade in goods and services, September 2024
View Article