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Indonesia steps up efforts to fight illegal rice imports

Publication Date : 08-04-2014

 

Indonesia's Trade Ministry will issue stricter rules on the importation of premium rice to avert market distortion caused by illegal shipments.

Importers of the special types of rice will have to secure recommendations, including import volume, from the Agriculture Ministry before applying for import permits to the Trade Ministry, according to Trade Minister Muhammad Lutfi.

The new policy will prevent certain importers using import permits for premium-quality rice to import medium-quality rice; averting an influx of cheap rice that can hurt local farmers.

“We aim to regulate who can and cannot import and by doing this we can easily detect who is responsible for illegal imports,” said Lutfi on Monday.

Under the new rule, which will be issued soon, rice importers will fall into two types: producer importers who will use the raw food for production of, for example, rice noodles and registered importers who will resell it to local buyers and distributors.

The latest policy effort was made following the early February finding that 32 containers of rice from Vietnam that had entered the country through Tanjung Priok Port, in three shipments, was of dubious quality.

The finding sparked speculation that the rice was of medium quality, thereby, raising concern over the leakage of such kind of rice through to end-consumers at the local market.

The government’s investigation concluded that the rice was of premium quality.

But the importers of the rice breached the rule because the delivered rice was different from that stipulated in their import permits.

The government has processed the punishment for the abuse
of licences.

Indonesia, the world’s fourth most populous nation of more than 240 million, has gained a slight rice surplus over the past two years, particularly thanks to favorable weather, removing the necessity to import medium-quality rice — the staple food for the majority of its people.

Last year, its total output topped 37 million tons of rice, while domestic consumption reached 35 million tonnes of rice.

However, the country regularly imports premium types of rice to meet niche market demand albeit in a small amount.

Last year, it only bought around 50,000 tonnes of premium rice from neighbouring countries, particularly Thailand and Vietnam.

Up to the present, there are between 800 and 900 rice importers with special importer identification numbers who are able to import rice.

Under the new rule, the categories of rice, identified by harmonised system (HS) codes, will be clarified, allowing the authorities to differentiate medium rice from premium rice quickly, according to the Trade Ministry’s director general for foreign trade Bachrul Chairi.

Importers first had to undergo a series of verification processes from related authorities to become producer importers or registered importers, said Bachrul.

A special team will be assigned to check warehouses where importers store their rice, while appointed professional surveyors, such as Sucofindo, will carry out technical tracking to the source of imports.

“We want to ensure that the importers are really the persons who work in rice trading or processing, so that we will supervise them more easily,” Bachrul said.

Apart from tightening supervision through the future policy, the government has integrated the administration of import recommendations and licenses through the Indonesia National Single Window, which allows online application.

 

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