Prices of Manufactured Products Rise
Friday, 26 October, 2007 | 17:29 WIB

Tempo Interactive, Jakarta: The prices of manufactured products will rise next year due to the soaring crude oil price on the world’s market. According to General Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), M.S. Hidayat, the rise is inevitable as the operational costs continue to swell due to the increase of the industrial fuel oil price.

The industrial fuel oil price was affected by the ‘black gold’s’ price on the world market. “It’s the only way industry can survive, although we are concerned the price hike can lower the consumers’ demand,” he told Tempo in Jakarta yesterday (25/10).

Hidayat explained the industry circle could only tolerate the CPO price hike to US$80 per barrel at the maximum. More than that, industry can collapse as national and global economic growth will be stagnant. “The government’s promises to reduce unemployment and to eradicate poverty will also be difficult to reach,” he said.

The CPO price continued increasing in the last three weeks, influenced by the plan of Turkey’s attack on Iraq and the heated political situation in East Timor. Last week, the world’s oil price reached US$90 per barrel, despite the fact that it began to go down yesterday to the level of US$87.95 per barrel on New York market. An analyst from Barclays Capital, Kevin Norrsih, as quoted by AFP, predicted the world’s oil price may reach US$100 per barrel by the end of this year as the demand is still high.

General Chairman of the Indonesian Entrepreneurs Association, Sofyan Wanandi, estimated the manufactured products price will rise between 2 and 5 percent starting next year. “That the most moderate number,” he said. The products whose CPO element is high, he said, can rise higher.

Sofyan said entrepreneurs undergo difficulties in putting pressure on the production cost components, such as base commodities, fuel, bank interest rate, workers and operational cost.

Head of Oleo chemical Producers Association, Kris Hadisoebroto, predicted that processed products price will rise 20 to 30 percent. This is caused by the crude oil price hike in the world market can also push up the price of CPO, the main base commodity of the oleo chemical industry.

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