Indonesia’s garlic shortage explained
Import restrictions on an extensive list of fruit and vegetables have forced the price of garlic to rocket in Indonesia, up by an average of 31% in February.
- Published: 15/03/2013 at 12:13 PM
- Newspaper section: breakingnews
The price of garlic has reportedly risen to more than 70,000 rupiah (213 baht) per kilogramme in some parts of Indonesia, forced up by a policy that aims to protect local farmers from international competition. The only problem? Indonesia produces a fraction of the garlic needed to meet local demand. (Photo by Suthon Sukphisit)
The price of garlic has reportedly risen to more than 70,000 rupiah (213 baht) per kilogramme in some parts of the archipelago, around three or four times the 50-85 baht per kg charged for local or Chinese garlic in Thailand.
The Indonesian government’s limitations on imported produce were purportedly designed to allow for better checks of food quality, although officials have admitted that the main aim was to protect local farmers from international competition.
The problem with that however, according to a Financial Times blog published on Thursday, is that Indonesia produces just 14,000 tons of garlic per year – a fraction of the national demand of around 400,000 tons.
It seems that Indonesia added garlic to the list of protected local fruits and vegetables without first checking if it could produce enough domestically to satisfy demand.
The Financial Times describes the rising price of garlic as “the latest example of the government’s protectionist policies back-firing”.
It says Indonesia’s trade ministry has reacted by fast-tracking import licences for 92 companies to bring in 134,600 tons of garlic to stabilise the market.
"Hatta Rajasa, the co-ordinating economic minister and the alleged chief architect of many of Indonesia’s nationalist policies, has admitted it was a mistake to curb garlic imports, given that Indonesia imports 95% of its supply from China," the FT reports.
In January, the United States filed a trade dispute with the World Trade Organisation (WTO) against Indonesia's restrictions on imports of horticultural and animal products.
The US said Indonesia violated WTO rules and had damaged US exports.
"Indonesia's opaque and complex import licensing system affects a wide range of American agricultural exports," US Trade Representative Ron Kirk said in a statement.
"It has become a serious impediment to US agricultural exports entering Indonesia, reducing Indonesian consumers' access to high-quality US products."