Indonesia food prices face volatility amid high production costs

Indonesia is facing significant challenges in its agricultural sector, characterized by high production costs and fluctuating food prices. Coordinating Minister for Food Affairs Zulkifli Hasan noted that domestic rice production costs range from Rp 12,000 to Rp 14,000 per kilogram, significantly higher than the Rp 4,000 per kilogram seen in Thailand and Vietnam. This disparity is attributed to suboptimal irrigation management and inefficient fertilizer distribution.

Recent data from the Central Bureau of Statistics (BPS) shows varying price trends for essential commodities. While some reports indicate a slight 0.16 percent increase in medium and premium rice prices, other data shows significant spikes in chili prices, with red chili and bird's eye chili exceeding government price ceilings. Specifically, bird's eye chili prices reached an average of Rp 88,642 per kilogram.

Despite these inflationary pressures on food, some regional indicators show improvement. The Farmer Terms of Trade (NTP) in East Java rose to 121.07 in September 2026, a 1.70 percent increase from August, suggesting improved purchasing power for some farmers. Additionally, in Lebak, Banten, some vegetable farmers reported monthly incomes of up to Rp 15 million through diversified crop cultivation.