Reference Date: 07-June-2022

Favourable production prospects for 2022 main food crops

Harvesting of the 2022 main paddy crop is currently ongoing and will finalize in July, while harvesting of the maize crop was completed in April. Precipitation amounts during the 2022 rainy season (December‑May) were above average and well distributed throughout the country, benefitting planting operations and crop development. As of April, remote sensing data shows above‑average vegetation conditions in most cropping areas, with favourable yield expectations (VCI map). The area planted for paddy and maize crops is estimated above the five‑year average, driven by strong domestic demand. Overall, the output of both crops is expected to be above average.

Sowing of the 2022 secondary (off) minor season maize is ongoing under generally favourable weather conditions, while planting of rice is about to start and is expected to finalize at the end of June. According to IRI/CPC forecasts, there is a high probability of above‑average precipitation amounts over most parts of the country during the next three months (June‑August), which is expected to benefit planting operations and support germination of secondary crops.

Cereal import requirements in 2022/23 estimated at above‑average level

On average, about 60 percent of the country’s total consumption needs are covered by imports. Cereal imports in 2022/23 (January‑December for rice and April‑March for other cereals) are forecast to increase to about 200 000 tonnes, mostly reflecting an anticipated increase in imports of rice. Import requirements for maize are estimated close to the five‑year average.

Domestic prices of cooking oil at record level in April

Prices of imported rice, the most consumed staple in the country, have been steadily increasing since February, mirroring the trends in the international markets and supported by high fuel and transportation costs. Prices of local rice are twice higher than the imported rice, considering its limited availability and consumer preference during ceremonies and special events. Local rice producers normally consume most of their production and only limited quantities are sold in markets. The national average price for local rice has been increasing seasonally since February 2022 and, last April, it was above its year‑earlier level, amid tightening supplies ahead of the arrival of the main crops into the markets. Domestic prices of cooking oil, almost entirely imported, have been increasing since October 2021 and surged to record levels in April 2022, in response of an export ban implemented by Indonesia (the world’s major producer and exporter of palm oil). Overall, April quotations of cooking oil were 17 percent higher month on month and 54 percent above their year‑earlier levels. On 23 May 2022, the Government of Indonesia lifted the ban and reinstated the possibility to export crude palm oil, given sufficient domestic supply conditions (see link for more information).

According to the National Statistics Directorate, the year‑on‑year increase of the Consumer price index (CPI) was estimated in April at 11.5 percent, while the food CPI increased by 14.9 percent on a yearly basis. The highest yearly increases were registered for prices of oils and fats, estimated at 41 percent, followed by vegetables and milk, cheese and eggs that increased by 33 and 25 percent, respectively. The CPI of bread and other cereals was estimated at a low 2.3 percent.

Food insecurity deteriorating due to multiple shocks in 2021 and 2022

In 2021, the food security situation has deteriorated for a large number of people due to multiple shocks, including income and job losses related to the COVID‑19 pandemic, high domestic food prices and the negative impacts (damage to property, localized losses of crops, loss of livestock and food stocks) of flooding in April 2021 caused by Cyclone Seroja. According to the 2021 Socio-Economic Impact Assessment of COVID‑19 , published in January 2022, 40 percent of the total population (about 500 000 people) was estimated to be moderately or severely food insecure in 2021. The number of food insecure people may increase in 2022, considering the elevated international prices of energy, fuel and food, which have been transmitted to the domestic markets. Prices of important food items such as oil and fats, fruit and vegetables, were at record or near‑record levels in April 2022 and may remain at high levels, seriously limiting households’ access to food. Fuel prices have been increasing since the start of the war in Ukraine at end of last February, which is expected to lead to increased agricultural production costs. However, the current high international prices of fertilizers and pesticides are expected to have a limited impact on food production as their utilization is extremely low.

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