Vegetable Oil Price in Indonesia

(article from long ago..)

Recently, the price of some basic commodities has increased. One of the basic commodities which price is increasing is vegetable oil. The increasing price of vegetable oil in Indonesia is generally due to the increasing price of the world’s coconut oil. This condition of the increasing price of the vegetable oil has forced some home industries which use vegetable oil as their main material to close down their business. Only some of them who keep on running their business, although they couldn’t get as much profit as they used to get when the vegetable oil price was still low.

Ibu Asih is one of the people who keep on struggling in producing snacks even though the price of the vegetable oil is increasing. She produces various kinds of snacks such as “kacang kapri (fried peanuts), kacang telur (fried peanuts in flour), keripik singkong (fried sweet potato), and kerupuk (crispy fried flour with various flavors). Everyday, she produces about 5 kilograms of kacang kapri and kacang telur and 2 kilograms of keripik singkong and 3 kilograms of kerupuk. She’s been producing snacks since her eldest son went to school. Her husband is a “bemo” (public transportation in Singaraja) driver so that she has to help her husband to pay for her sons’ school fee. In producing the snacks, Ibu Asih needs five kilograms of vegetable oil everyday. The price of the vegetable oil before it increased was Rp. 5,000 per kilogram but now, Ibu Asih has to pay extra since it increases and reaches Rp. 9,000 per kilogram.

When the price of the vegetable oil was Rp. 5,000 per kilogram, Ibu Asih could get profit Rp. 30,000 – Rp. 50,000 per day. However, the increasing of the vegetable oil price has made Ibu Asih lose profit. Ibu Asih couldn’t raise the price of her products because if it is done, then the customers will complain and she will lose more profit. What she does is reducing the quantity of her products in each bale. Although it seems smaller but Ibu Asih can keep the price of her products. Ibu Asih starts her activity at about 5 in the mornings. She prepares all the main materials of the snacks such as the peanuts, sweet potatoes and the “kerupuk”. She soaks the peanuts in cool water for some hours.

Then, she peels it and mixes it with spices and salt. She fries the peanuts and then let it cool for some minutes. The last step is packing the fried peanuts in transparent plastics. Ibu Sintya also produces Kacang telur, keripik and kerupuk. To produce kerupuk, she buys ready made kerupuk in the market but before it can be consumed it has to be dried first under the sunshine and then it has to be fried in hot vegetable oil. In the afternoons, Ibu Asih rides around the city on her bikes to hand over her snacks to some food sellers in markets and terminals. She sells 13 packs of snacks for Rp. 5,000 so her customers can sell it again Rp. 500 per pack. Sometimes, her customers give the previous snacks back to her because it has ruined due to the long time since it was produced. In this case, Ibu Asih accepts it and changes it for a new one.

“I hope the price of the vegetable oil will be decreased by the government so people like me can continue to do our source of living”. Ibu Asih answered when I asked about her expectation in the future. After saying this, she got on her bike and left my mother’s stall because there were some other customers waiting for her delivery. There are many people like Ibu Asih that get the impact of the increasing price of the vegetable oil. Ibu Asih and those people cannot do anything to decrease the price because only the government and the producers of the vegetable oil can do it. So, they just hope that the government and the vegetable oil producers will pay their intention to the increasing price of the vegetable oil.