This study aims to investigate the association between climate anomalies and rice price dynamics in Indonesia, a country ranked among the most vulnerable to climate-related hazards, such as floods and droughts. To address this objective, the analysis employs a panel vector autoregression model with exogenous variables, using data from 179 surveyed markets across 34 provinces. The variables considered are monthly rice price data compiled from the World Bank Real Time Food Prices (RTFP) dataset, and high-frequency temperature and precipitation data compiled from the NASA POWER dataset, covering the period from January 2007 to June 2025. This study finds that climate anomalies are positively and significantly associated with short-run rice price changes. Specifically, short-run rice price changes tend to show upward movements in response to initial positive shocks in both temperature and precipitation. In addition, the findings highlight regional heterogeneity in how short-run rice price changes respond to climate shocks. Finally, the findings suggest the potential relevance of timely government-led market-stabilization policies, such as food subsidy programs and import regulations, in mitigating rice price disruptions caused by climate-related shocks.
Pratiwi et al. (Sun,) studied this question.