ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Indonesia holding off rice imports
Publication Date : 14-08-2013
The Indonesian government has yet to decide whether or not it will import rice to secure stock for the year-end, hoping that the prolonged wet season will boost rice production in the country.
Agriculture Minister Suswono said his ministry had called on farmers to take advantage of the frequent precipitation by planting paddy. This will add more rice reserves and avoid importing the staple food.
The climate is deemed suitable to boost rice production with rain that is quite regular and, thankfully, not excessive — something that can reduce possibility of harvest failures due to drought and floods.
“Whether or not we will import more rice depends on how much Bulog [the State Logistic Agency] can absorb domestic production. The amount of imports will be decided on how much Bulog needs to fulfill its minimum year-end stock of two million tons of rice,” Suswono told reporters on Monday.
“We, however, are still studying how much we can produce until the end of this year as the prolonged wet season has big potential to boost production that we might not need to import rice at all.”
Bulog president director Sutarto Alimoeso previously said that the country might have to import at least 600,000 tons of rice later this year due to low production caused by weather anomalies and poor irrigation systems.
Sutarto said rice imports were unavoidable because Bulog’s inventory had declined sharply after being used to provide the poor with 700,000 tons of rice as a government compensation scheme following the increase of the subsidised fuel price.
He said rice imports were also necessary because of the lower-than-expected unhusked rice production this year, which was expected to increase only 0.31 per cent to 69.27 million tons, according to a forecast made by the State Logistic Agency (Bulog). Bulog has to keep the year-end stock of 2 million tons to supply needs and stabilise the price during the January-March planting period, when stocks are low.
According to Central Statistic Agency (BPS) data, last year Indonesia produced 69.06 million tons of unhusked rice or equal to around 40 million tons of rice.
Suswono said that BPS data was just a forecast that the government should study thoroughly before making any decision.
“Rather than importing rice, most of which are old stocks that are needed to be distributed quickly to avoid degrading quality, Bulog should better rely on fresh domestic production. If we import rice and harvests turn out to be abundant, it will only lead to significant price falls,” he explained.
In July last year, the government told Bulog to import up to 1 million tons of rice, but only 670,000 tons were brought in — 600,000 tons from Vietnam and 70,000 tons from India.
State-Owned Enterprises Minister Dahlan Iskan previously said that with the positive trend in production, Indonesia would not need to import more rice this year.
Indonesia was self-sufficient on rice in 2008 and 2009, but imported rice in 2010 to maintain reserves after failed harvests, before seeing a gradual increase in production in subsequent years
Indonesia signed a deal with Myanmar last year, which agreed to sell the country up to 200,000 tons of the commodity per year if necessary.