ASEAN KEY DESTINATIONS
Thailand urged to complete rice sale
Indonesian government logistics agency Bulog wants Thailand to fulfill its commitment to sell rice to Indonesia under existing contracts, despite Thai claims that the stipulated price is too low.
“They have to fulfill the rice sales contract signed by both the Indonesian and Thailand governments in August,” Bulog chief Sutarto Alimoeso said.
Under the contract, Thailand must ship 300,000 tons of rice to Indonesia this year. Sutarto said Bulog had not received a response to two letters sent to Thailand’s Commerce Ministry in early September.
Thailand, the world’s largest rice exporter, previously canceled plans to sell rice to Indonesia, citing low prices, Thai Commerce Minister Kittiratt Na Ranong said on Wednesday as reported by Bloomberg.
Indonesia, the third-largest rice consumer in the world, signed a contract in August to import 300,000 metric tons of rice from Thailand to rebuild its stockpiles and curb domestic price hikes.
“The rice price in the contract is quite good for Indonesia but it is not too low,” Sutarto said, adding that Indonesia would reduce the price it paid for rice by 10.5 percent under the bargain.
Sutarto said that Bulog, the Trade Minsitry, the Foreign Ministry and the Indonesian embassy in Bangkok were currently attempting to persuade the Thai government not to cancel its contract.
Indonesia remained optimistic that Thailand would not cancel the agreement, Sutarto said, as the nations had a long-standing record of friendship and business deals. However, Bulog was aware that Thailand’s rice producers were currently experiencing difficulties.
“We have other markets, such as Vietnam, which have never breached any agreement,” he said, adding that Indonesia was also considering importing rice from China, India, Myanmar and Pakistan.
The suspension of Thai rice imports has not affected current supplies in Indonesia, as the imports would be used to increase stockpiles next year.
As of September, 200,000 of a planned 500,000 tons of rice imports have arrived from Vietnam.
Indonesia previously planned to import a total of 800,000 tons of rice this year, including 500,000 tons from Vietnam and 300,000 tons from Thailand, to maintain a 1.5-million ton stock for market operations to stabilize prices, Sutarto said.
Existing supplies would be enough for the next four to five months, he said.
Separately, Coordinating Economic Minister Hatta Rajasa said the government was committed to increasing its minimum rice stockpile to 2 million tons by 2012 or 2013.
Hatta said additional rice imports were needed to curb rice price spikes in the domestic market, which had become the largest contributor to inflation in August.
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