ASEAN KEY DESTINATIONS
Indonesia grows more rice
Despite the improving outlook, analysts still see Southeast Asia’s largest economy entering the rice import market again this year, as it may look to boost stockpiles to keep inflation at bay.
Unmilled rice production is seen at 68.06 million tons in 2011, 2.4 percent higher than last year and up slightly from a forecast earlier this year for 67.31 million in 2011, the Central Statistics Agency (BPS) said on Friday. It said there were more harvest areas this year, at 313,150 hectares, up 2.4 percent versus the previous year.
“It’s a bit surprising, the number,” said Ker Chung Yang, an investment analyst at Phillip Futures. “Rice production in Indonesia, I didn’t expect it to come above the [first] estimation, and it will surprise the market.”
“The amount of rice they import keeps on increasing,” he added. “The import momentum may persist despite the fact they are expecting higher production...they are importing not only for consumption, but also for stockpiles as well.”
The Agriculture Ministry said on Friday that it had an even higher rice production target of 70.6 million tons, which it said would lead to a surplus of 5 million to 6 million tons in 2011.
In March, the BPS forecast a 4.29 million ton rice surplus this year, but it did not give a new figure on Friday. Traders say the country is already in talks with Vietnamese suppliers for imports, but the government has denied any such talks so far. Bumper rice purchases early this year surprised markets and lifted regional prices.
On Wednesday, traders and a Vietnamese state newspaper said Indonesia has been in talks to import between 400,000 and 600,000 tons of rice from Vietnam to capitalize on lower prices, with shipment possible in the third quarter of this year.
A Trade Ministry official said on Thursday that Indonesia had yet to decide whether to import more rice this year. Under current regulations, rice cannot be imported during the main harvest season, from the end of March until June, to stop foreign grain depressing farmers’ prices.
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