Indonesia’s flour prices could soar

Flour prices in Indonesian are predicted to see increases as steep as 20 per cent due to supply shortages from Russia and Turkey, the Indonesian Association of Sugar and Flour Traders (Apegti) has said.

Prices have gone up 10 per cent due to increasing demand during Ramadan and are likely to rise 20 per cent after the festivities as Russia and Turkey are cutting back on exports, Apegti chairman Natsir Mansyur said on Sunday.

He said Russia, the world’s third-largest wheat exporter, had cut exports because bad weather had disrupted production.

Russia believes its grain harvest could plunge 38 per cent this year to 60 million metric tons.

The estimate may be cut further because of a worsening drought, the newspaper Jakarta Globe said.

“Other wheat exporters such as Canada have also been affected by extreme weather and this could hurt us further because we import from Canada,” said Mansyur.

Indonesia imported all of its wheat demand – 4 million tons a year as well as 500,000 tons of flour annually.

“We are very dependent because Indonesia’s climate is not suitable for growing wheat,” Mansyur said.

He also mentioned that Turkey had also cut its exports to Indonesia because it has imposed anti-dumping rules on Turkey’s flour.