Diversification of Raw Materials Needed Amid Soaring Prices

Due to uncertainties in the global economy, prices of almost all raw material commodities have increased. The fall in the rupiah exchange and the world inflation surge have only worsened the situation.

KOMPAS/RHAMA PURNA JATI

Activity at Lemabang Market, Palembang, South Sumatra, tends to be quiet on Friday (1/7/2022). A number of commodity prices in this market, such as red chilies, shallots, and cayenne peppers jumped significantly. This condition causes high inflation in South Sumatra.

JAKARTA, KOMPAS — The surge in world inflation and the weakening of the rupiah exchange rate have caused a sharp increase in prices of industrial raw materials. In order to cope with supply uncertainty, the diversification of raw materials and the improvement in supply-chain efficiency are needed to keep production running.

Many industries such as food and beverage producers have difficulty in obtaining quality raw materials at affordable prices. Prices of raw materials have significantly increased due to the disruption in the supply chain and geopolitical tensions as the result of the Russian-Ukrainian war, in addition to export restrictions imposed by a number of countries.