Indonesia's President Susilo Bambang Yudhoyono has announced that the priority for his economic policies in 2006 is to bring down inflation.

High inflation has wreaked havoc, not just on consumers, but also on the business sector of Indonesia, which in turn affected investment, employment and people's incomes.

High interest rates will thus be detrimental for Indonesia's consumption-driven economy, as both consumer and commercial lendings for business activities become more expensive, thus stalling overall economic growth.

Broiler

Slower economic conditions have already been seen in the broiler market, especially in terms of demand. Despite relatively limited stocks in farms, the price remained below production costs in the biggest broiler market of Jakarta and Botabek area.

Broilers were traded at Rp 7,100/kg in Jakarta in the week ending Jan 14, a slight drop of Rp 400 from Rp 7,500/kg the previous week.

In Surabaya (east Java), the broiler price was Rp 5,800/kg as of Jan 13, also far below production cost. A similar condition was seen in Semarang (central Java), where broilers were traded at Rp 5,600/kg, falling continuously from Rp 5,800/kg the previous week.

Egg

On the other hand, news reports on the use of formaldehyde as a low-cost food preservative have convinced many rattled consumers to make healthier food choices. Many households are now very careful about food selections, buying only buy fresh fish or eggs and stopping tofu and meatball consumption.

As a result, egg prices were kept high during the week ending Jan 14. In Jakarta, eggs were traded at Rp 8,200/kg, the same as the previous week.

In two egg-producing areas Blitar (east Java) and Palembang (south Sumatra), egg prices also closed higher due to increased demand. In Blitar, eggs were traded at Rp 7,350/kg as of Jan 13, a slight rise compared with the previous week's prices of Rp 7,200/kg.

In Palembang, egg prices closed Rp 100 higher on Jan 13 to Rp 7,300/kg, from Rp 7,200/kg the previous week.