Food Prices Fall After School Meal Pause

RRI.CO.ID, Jakarta - Food prices are fluctuating as the current school holidays lead to the temporary suspension of the Free Nutritious Meal (MBG) program. This pause in institutional purchases has noticeably impacted the prices of staples like chicken and eggs.

The MBG program typically includes staples such as chicken, eggs, various vegetables, and rice, which creates consistent demand. With the kitchens closed, the market has seen a decline in the prices of these specific items due to the sudden reduction in institutional procurement.

Chicken prices, in particular, have dropped significantly since March. They have fallen from 43,000 IDR per kg to approximately 33,000 IDR per kg in Medan.

Similarly, egg prices in Deli Serdang, a regency in North Sumatra, saw a decline from 30,600 IDR per kg in May to 28,300 IDR per kg by late June. This downward trend highlights how sensitive these specific local markets are to the program's operations.

In contrast, vegetable prices remain highly volatile due to supply and seasonal factors, with some items rising while others fall. Unlike the consistent demand for animal protein, vegetables are readily substituted, allowing kitchens to adjust their menus and purchasing habits easily.

While the school holiday is a primary driver, authorities should monitor these price drops closely. There is a possibility that this downward trend could also reflect broader pressures on household purchasing power.

Ultimately, the market impact of the MBG program illustrates the importance of institutional demand for price stability. Stakeholders should remain vigilant as they assess whether these price shifts are temporary or signify deeper economic challenges.

Writer: Gunawan Benjamin (Economist, Islamic University of North Sumatra)