IO – The agricultural sector, especially Indonesian horticultural products, faced many challenges in early 2020. The price of cayenne pepper in Jakarta soared, surpassing IDR 100,000 per kg. Steep increases in chili prices impelled the Food Security Agency (BKP), the Ministry of Agriculture, hold a market operation last Friday (02/07/2020). Prices subsequently began to fall.
Along with the increase in cayenne pepper, the price of garlic also fluctuated sharply upwards, reaching IDR 70 thousand per kg, about double the price at the beginning of the year. What is worrying is that this price still shows upward momentum. Some even estimate that the price of garlic can follow the price of chili, reaching IDR 100,000 per kg. If this happens, will the BKP hold market operations again, as they did for chili commodities?
The possibility of a successful garlic market operation being held is very small, because Indonesia does not have a stock of garlic originating from domestic cultivation. Domestic consumption needs reach more than 550,000 tons, and are mostly met from imports, with 90% from China. Other countries, such as India, fill the remainder.
The recent increase in the price of garlic shows that national stocks are running low. In fact, they are only able to survive until the end of this month, as the amount is estimated at below 50,000 tons, even though consumption needs reach 47,000 tons per month. If this data is correct, then the market will cease to work.
To stabilize prices through market operations, Indonesia must increase stock by importing this commodity. Without imports, it will be impossible to carry out market operations. It is impossible for the price to settle because local garlic production has not been able to meet the needs. If anything, it is mostly used for seedlings, as there is a government program to provide garlic seedlings to farmers.
The yields of planting garlic from government assistance should be used as seedlings again for subsequent planting. What remains an obstacle, the results of this program have not been as expected. Therefore, local garlic is difficult to find in markets, both traditional and modern (supermarkets).
Indonesia inevitably has to accelerate the import of garlic. The problem is that China, as the world’s largest garlic exporter and the largest supplier to the country, is being hit by the Coronavirus, which is very alarming. Many advocated delaying imports from China. But, if you don’t import from China, which country do you want to import from?
China is the world’s largest producer of garlic, with a total production of around 25 million tons per year, controlling 78 percent of world production, far beyond the ability of the second-largest producer, namely India, which is only capable of growing less than 1.5 million tons per year. The world’s third-ranking producer is only able to deliver 400 thousand tons per year.
Thus, no other country can replace China for a supply of garlic. It is thus almost certain that the import of garlic from China will continue, in spite of the calamity that is engulfing that nation. Coronavirus seems unable to affect stop the export of Chinese garlic to Indonesia.
Any delay in opening the import faucet will have a serious impact. The price of garlic may overtake the price of chili as many have predicted, exceeding IDR 100,000 per kg. This is a consequence of Indonesia’s garlic dependence on imports, especially from China, which is the largest supplier.
Let us suppose, what will happen to the availability and price of garlic in Indonesia if the Coronavirus spreads in Jinxiang, the center of the Chinese and world garlic trade?
We therefore suggest that a garlic food security program must be strengthened by conducting more aggressive local planting. The compulsory 5 percent planting policy for importers is on the right track. To accelerate, maybe compulsory planting can be increased to 10 percent.
Garlic’s food security target may at least meet 50 percent of the total national consumption needs of domestic production. Let us pray that the Coronavirus disaster in China and other places will end soon, so that the problems that hit overseas exporters do not become a disaster for Indonesia.