A delay on permits for garlic imports has led to a dearth of product on the Indonesian market. Though supplies have recently been coming in, prices are still much higher than they've been in previous years.“Normally, the price of garlic is between $1,5 and $2,5 per kilogram,” said Mr. Kafi Kurnia, Managing Director of Peka Consult Inc. - marketing consultant for those wishing to bring produce into Indonesia. “The price right now is above three dollars per kilogram.” He added that the price had gotten up to six dollars per kilogram about a month ago, but increased supplies made for lower prices. The price surge was a result of tight supplies because of a lack of imports, noted Kafi Kurnia.
“Permits for importing garlic were issued late by the Indonesia government,” he said. “So the market was empty and prices were high.” Those prices have not affected affluent consumers, who are not usually motivated by price, or less well-off consumers, who have simply looked to substitutes in the face of rising prices. Instead, restaurants and hotels, who have tight margins and can't use garlic substitutes in their food, have felt the price spike the most.
Similarly, the price for shallots has also been on the rise because of low supplies. The local harvest is almost over now, and tight supplies have caused prices to continue to rise. Though Kafi Kurnia thinks increased supplies will eventually enter the market and lead to lower prices, he thinks that's still several weeks away.
In the future, he thinks Indonesians will be less susceptible to price fluctuations as a growing middle class with increased spending power attracts more imports and bigger supplies of produce.
“The middle class is growing very fast in Indonesia,” said Kafi Kurnia. “So the opportunity for imports will be very great.”
