Monday, November 19, 2012

Price increase "abnormal"

The headline of Kompas today reads "The Price Increase [of Beef] Not Normal". It is reported that by the third week of November the price hit IDR 150,000/kg - while it had been hovering around IDR 80,000/kg in the foregoing six weeks.

The resource persons interviewed reason that 1) self-sufficiency should be achieved and import should be further restricted, 2) the domestic stock is actually sufficient.

The two explanations contradict each other. If the domestic supply is sufficient, then we don't need the call for self-sufficient anymore. We're there already. Secondly, if we are self-sufficient, there's no reason for foreign sellers to ship their meat here.

And both explanations contradict the title of the headline. If now the price increase is "not normal", then an increase in the supply should push it downward. Self-sufficiency and import restriction are likely to have the opposite effect. As for the second assertion, if the domestic supply is sufficient, price should be normal. Apparently, as the headline says, it is not.

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