Thai imported rice to feed Indonesia

The Indonesian government expects the next delivery of imported rice to arrive by the end of March and help address concerns of a shortage in the food supply, a minister said.

Citing traders in multiple countries, it was reported on Wednesday that the State Logistics Agency (Bulog) placed an order of 820,000 tons of imported Thai rice, more than four times higher than the initial order of 170,000 to 200,000 tons.

Sutarto Alimoeso, president director of Bulog, declined to confirm the amount.

State Enterprises Minister Mustafa Abubakar said Bulog needed to import more rice to plug a hole in domestic supplies.

"The rice order is a carryover from last year. The next shipment must come before March, because in March we will a big harvest here and that could disturb supply," Sutarto said. Rice is the main staple food for Indonesia.

Local farmers have supplied 130 tons of rice this month, Sutarto said, in addition to the supply in Bulog's warehouses.

He declined to disclose the current level of stocks, only saying they were enough to last until March. Bulog is obligated to keep around 1.5 million tons of rice in its warehouses at all times.

Bulog recently bought 650,000 tons of 15 percent broken grade and 170,000 tons of 5 percent broken grade white rice from Thailand.

The rice was sold for shipment in February and March at prices from $490 to $545 per ton on a cost, insurance and freight basis, the report said, citing exporters who were awarded deals.

Sutarto and Mustafa would not confirm the value of the imports.

An estimate indicated that the rice would cost US$400 million to $450 million.

Mustafa said Bulog needed to import rice to steady food prices across the board.

"Rice is essential to Indonesia. An increase in rice prices will trigger rises in other prices, causing inflation to soar," he said.

"Importing rice must be carried out to stabilize prices. Increasing rice prices is a sign of a shortage in supply."