Indonesia is struck by surging garlic prices as the fast-spreading coronavirus causes fears over supply disruptions. That’s because China accounts for about 80% of the world’s garlic supply, while Indonesia counts on the Asian country for 90% of its imports. Concerns that coronavirus could lead to a halt in those shipments has spurred an almost 70% surge in garlic prices in the capital Jakarta in just one week.
“Coronavirus has influenced market sentiment, causing sellers to abruptly lift prices,” said Abdullah Mansuri, head of the Indonesian Market Traders Association. “This occurred because we relied heavily on imports from a single country.”
Garlic is one of many commodities that are rattled by the crisis in China as it saps demand for everything from copper to jet fuel. And while garlic may not be high on the radar of the world’s financial markets, its use in Indonesian food is ubiquitous with everything from sambal to nasi goreng relying on the pungent bulb, meaning it could spur inflation like garlic, shallots and chili did last year.
Indonesia, the world’s top buyer, imports over 500,000 tons of garlic every year and is likely to be hit hardest by the potential supply risks from China. Retail prices have more than doubled in some markets to about 80,000 rupiah per kilogram ($5,839 a ton) in the past weeks, said the Indonesian Market Traders Association.