Indonesia to import 600,000 tons of rice due to low production

08.08.2013

The State Logistics Agency (Bulog) will have to import at least 600,000 tons of rice later this year due to low production caused by weather anomalies and poor irrigation systems, the agency’s senior executive said.

President director Sutarto Alimoeso said rice imports were unavoidable because Bulog’s inventory had declined sharply after the government needed to provide more rice for the poor after the recent fuel increases.

He said rice imports were also necessary because of the lower than expected unhusked rice production this year, which was expected to increase only 0.31 percent to 69.27 million tons due to weather anomalies.

The agency previously announced that it would be unnecessary to import rice this year as stocks and additional production would be more than enough to meet demand.

However, Sutarto now says that with the projected small increase in production, existing stocks would not be enough to meet demand as the government would distribute 700,000 tons from Bulog’s warehouses in the rice-for-the-poor program (Raskin).

“Bulog has to at least keep a year-end stock of 2 million tons to supply needs and stabilize the price during the January-March planting period, when stocks are low. Low production combined with the additional allocation for Raskin might lead us to import 600,000 tons of rice to keep a minimum amount of stock,” he said.

According to Central Statistics Agency (BPS) data, last year Indonesia produced 69.06 million tons of unhusked rice or around 40 million tons of rice. The annual national consumption of rice is around 34.05 million tons.

Last year, rice production rose 5.02 percent year-on-year, enabling Bulog to purchase 3.65 million tons of rice domestically, which is the agency’s record high for local rice procurement.

In July last year, the government told Bulog to import up to 1 million tons of rice, but only 670,000 tons were brought in — 600,000 tons from Vietnam and 70,000 tons from India.

State-Owned Enterprises Minister Dahlan Iskan previously said that with the positive trend in production, Indonesia would not need to import more rice this year.

Agriculture Ministry staple food director General Udhoro Kasih Anggoro contributed the low production to weather anomalies and damaged irrigation systems.

Anggoro estimated that 2.4 million of 7.3 million hectares of irrigated paddy fields needed rehabilitation, which further hampered efforts to increase production.

“If we could rehabilitate the damaged irrigation systems, we could boost products by 7 to 9 million tons of rice a year,” he said at a conference last week.

Agriculture Ministry infrastructure director general Gator Irianto said the government needed at least Rp 21 trillion (US$2.04 billion) to fix irrigation systems.

“We have allocated Rp 6 trillion to rehabilitate the systems this year, and expect to have all damage systems fixed within four years,” Gatot said.

Indonesia was self-sufficient in rice in 2008 and 2009, but imported rice in 2010 to maintain reserves after failed harvests, before seeing a gradual increase in production in subsequent years.

In January last year, Indonesia signed a deal with Myanmar, which agreed to sell the country up to 200,000 tons of the commodity per year if necessary.

Later in September, the country extended its deal with Vietnam, which will provide up to 1.5 million tons of rice as needed until 2017.


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