ASEAN KEY DESTINATIONS
Govt to import rice from Vietnam
Indonesia will gradually start to import rice this month to boost stockpiles as lower domestic output is expected this year.
The country had secured 50,000 tons of rice from Vietnam, comprising medium as well as premium types, State Logistics Agency (Bulog) chairman Sutarto Alimoeso said on Monday.
It had spent approximately Rp 300 billion (US$25.8 million) for the purchase of the Vietnamese rice sold at around Rp 6,000 each kilogram, he added.
“The move particularly responds to failed harvests earlier this year due to massive flooding in some areas,” Sutarto said, citing losses of 300,000 tons of rice from the floods affecting 116,000 hectares of farming land in a few rice-producing regions.
Bulog normally buys rice from local farmers, but the flooding had hampered the firm’s effort to absorb domestically produced staple food to build its stockpiles.
In addition to this, a number of farmers might also cancel plans to plant the crop as there has been an early warning about El Niño, which would affect output.
Bulog’s move to import rice this year is line with the expectation of agriculture experts, who have said that lower output might be seen due to the late planting season at the end of last year in addition to the long drought caused by El Niño.
The government aims to control 2 million tons in annual rice reserves in Bulog. As of May, Bulog’s stockpiles amounted to 1.9 million tons, lower than in the same period in 2012 and 2013 when the firm was maintaining more than 2 million tons.
Lower stockpiles are feared to weaken the government’s ability to take necessary measures to curb the price of the country’s main corp.
The rise in the price of rice has been a big concern as it usually triggers inflation. However, the government had repeatedly said that it would not import rice this year as it expected bigger output from last year.
The importation is being executed after the Central Statistics Agency (BPS) said in its first forecast of domestic production earlier this month that domestic rice production, measured by the output of unhusked paddy rice, would decline 1.98 percent from last year to 69.87 million tons in shrinking farmland areas and productivity.
To offset the slide, the government has released an indicative figure for imports of around 500,000 tons.
Sutarto, however, declined to elaborate on the overall figure of rice imports planned, saying that his firm would closely monitor rice-price fluctuation and would act accordingly based on needs.
“If the initial purchase [of 50,000 tons] proves sufficient, we will stop imports, and do otherwise if demand has yet to be met.
Basically we want to avert the bad impact of an insufficient supply,” he explained.
Sutarto underlined that Bulog would prioritize domestic purchase instead of importation when rice from local farmers was sufficient, although its price could be higher than imported rice.
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