Bank Indonesia flags El Niño risks to food supplies and inflation

Bank Indonesia is urging stronger food distribution arrangements to limit price pressures as El Niño threatens production and supplies. The central bank said rice, chillies and shallots require particular attention if dry conditions persist into early 2027.

Ricky P. Gozali, head of a Bank Indonesia representative office, said national inflation rose in September 2026 but remained within target. Inflation in the volatile food category stood at 5.03 per cent.

The highest regional food inflation pressures were recorded in Sulawesi, Maluku and Papua, collectively known as Sulampua, at 8 per cent, followed by Kalimantan at 7.2 per cent.

Ricky said El Niño was expected to last until early 2027 and could affect food output and availability. He identified Sulampua, Bali-Nusa Tenggara and Sumatra as areas needing particular attention.

For the near term, the central bank is encouraging better distribution facilities so food can move promptly from surplus areas to those facing shortages. Longer-term measures include development across the food supply chain, irrigation infrastructure and seeds better able to withstand changing weather.

Bank Indonesia is also developing a supply-chain dashboard for government use to monitor stocks, identify surplus and deficit areas, and select efficient distribution routes. Ricky said coordination with local governments and regional inflation control teams would continue to support supplies and price stability.