INDF to adjust prices if rupiah continues to fall

Publicly listed instant noodle manufacturer PT Indofood Sukses Makmur has announced that it will adjust its prices if the rupiah continues to weaken against the US dollar.

“We will continue to pay attention to the weakening of the rupiah to see whether it is a short- or long-term condition. If it is a long-term weakening, there will be price adjustments,” said Indofood director Franky Welirang in Jakarta on Friday evening.

Franky said the weakening of the rupiah had affected the price of wheat, which was the main ingredient of many of its products.

“Wheat is mostly imported from Australia, Canada, India, the United States and Ukraine. If the rupiah continues to weaken, wheat flour will be more expensive. Wheat flour accounts for 70 percent of the cost of the company’s products,” Franky said.

Normally demand increases for raw materials such as wheat flour by up to 20 percent ahead of Idul Fitri, Franky said.

“Two weeks before Idul Fitri, the price of flour usually rises up to 20 percent because there is increased production of bread, cakes, cookies and other snacks,” he said. (ebf/The Jakarta Post)