Macro forces outlined above culminate in beef price levels and trends presented in this section. Figure 7 reports on weekly (2011-2012) and monthly (2013 to March 2015) beef prices in Jakarta. Beef prices in Indonesia are high by world and regional standards and an average of three times more expensive than the most highly-consumed meat, chicken. Prices increased rapidly between 2001 and 2012 at an average of 10.6% per year in Jakarta. However this was in line with increases in chicken prices, lower than average inflation rates and lower than expected GDP and income increases, making beef no more expensive for the average consumer.
Figure 7: Weekly beef prices in Jakarta, 2009 to November 2012
Source: MoA (various years)
Jakarta beef prices were Rp74,000 in August 2012 leading into Idul Fitri that year. With high demand and constrained imports, prices leapt to Rp92,000 by February 2013 at a rate well above inflation, previous years and other meats. Perhaps because of subdued demand (price elasticities) and certainly because of increased imports in 2013 and 2014, prices stabilised and reached Rp96,000 in February 2015. It is widely reported however that prices increased to high levels (above Rp100,000) in and after Idul Fitri in July 2015.
There is also significant seasonality in beef prices, shown in Figure 7, as “waves” of price increases of around 10% leading into Idul Fitri3 although there are other events throughout the year that influence prices (other festivals, holidays, season, payment of school fees before term starts) which means that prices fluctuate significantly within the year.
Figure 8 presents weekly (2011-2012) and monthly (2013 to March 2015) beef prices in three cities (Jakarta, Surabaya, Denpasar). For comparative purposes, chicken meat prices in Jakarta and an inflation index are included.
Figure 8: Inflation, beef and chicken meat prices in selected cities, 2001-2015
Source: MoA (various years)
The price of beef in Jakarta is considerably higher than in cattle production areas to the east; an average of 11% higher over the period than East Java (Surabaya), and 35% higher than Bali (Denpasar). The prices tended to move together in the short term suggesting an integrated beef market. However, integration is constrained by domestic trade policy (provincial and local quotas) and price differences can be higher than the costs of inter-regional trade.
