The price of onions is making Indonesians cry, steal, and scapegoat

The price of onions is making Indonesians cry, steal, and scapegoat

By Roberto A. Ferdman — 3 hours ago

The price of onions in Indonesia has soared so high that people are resorting to stealing the crop. Farmers are spending nights in their fields to ward off thieves.

But while they cry over lost onions, government officials seem more concerned with finding a scapegoat for the extended spike in onion prices. A paltry 10% of Indonesia’s onions are grown domestically; they cost 10,000 rupiahs ($1.26) per kilogram, up 400% from the end of last year.

Indonesia is hardly the only country where the price of onions—a staple of Asian cooking—matters so much. A popular book titled The Price of Onions by Ashok Desai maintains they are at the heart of understanding the Indian economy. A more recent article in the Times of India refers to doubling prices as “the Great Onion Robbery.”That’s just a metaphor, though, for how consumers feel. In Indonesia, they’re literally stealing onions. Normally, farmers would be cashing in on rising prices, but the burglars are putting a damper on that, according to a report by the Straits Times in Singapore.

The paper cites a directed attack by the coordinating minister for economy:

Mr Hatta Rajasa, bluntly told reporters at the sidelines of an official trip in Yangon, Myanmar: “The fault lies with the Agriculture Ministry… and the trade system needs to be overhauled.”

Meanwhile, another piece in Bisnis Indonesia, a daily newspaper based in Bahasa, points out that the head of Indonesia’s Chamber of Commerce, Suryo Bambang Sulisto, has openly blamed rising onion prices on the market’s largest players. Sulisto mentions trade fraud in blaming 21 unnamed companies, which he claims control up to half the market. Though it’s unclear what fraud exactly it is that he means, the Straits Times reported that some importers may be purposely stalling permits in anticipation of further price spikes.

President Susilo Bambang Yudhoyono has asked for more transparency in disclosing data on onion supply, demand, consumption and production so that the government can act accordingly. But he has also said that the ministry of agriculture and ministry of trade “should work day and night” to resolve the country’s onion price instability.

Until that happens, it sounds like both government’s blame game and farmer’s all-nighters will continue.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: