So far, Indonesia which has a total need for rice per annum of about 31 million tons, has always imported rice to increase its stocks at home from Vietnam or Thailand.
"Food production, rice in particular, is prone to problems. Thailand and Vietnam are big exporters but some other countries also have rice surplus such as Pakistan, India, Myanmar and Cambodia," President Director of the National Logistics Agency Bulog, Sutarto Alimoeso said.
The Logistics Agency chief said there was no problem if Indonesia tried to explore cooperation on rice procurement with India or Pakistan for example as it did not want to face a risk with regard to rice supplies.
According to External Trade Director General Deddy Saleh, Indonesia is now exploring cooperation on rice procurement with India and Pakistan. "Pakistan has made an offer since long ago and now we are going to explore it.
It is an effort to prepare a stand-bye source so that we will not depend on what already exist now and to raise our bargaining position," Deddy Saleh said.
Indonesia and Pakistan had exchanged a draft note of memorandum of understanding (MoU) regarding the rice procurement cooperation. "We have sent the draft MoU early this year and we are now waiting for Pakistan`s response," he said.
With India, the government was still planning an initial talk. "We will have talks with them immediately. We have sent a letter to the Indian government," he said.
India and Pakistan are among countries which have rice surplus and have the potentials to become rice procurement partners for Indonesia, apart from two big rice producer countries which so far become Indonesia`s main partners, namely Thailand and Vietnam.
Although Indonesia produces relatively large volume of rice, yet it still needs to rice import to increase its stocks for market operations when prices are showing an upward trend during certain times such as in the face the fasting month or when harvests failed.
This year, for example, the government has allowed the importation of rice. In order to prevent the decreasing stocks in Bulog`s warehouses the government had given the green light for state-owned firm (BUMN) to import rice.
"We have signed a contract for the purchase of 500,000 tons rice with Vinafood 2, one of the Vietnamese exporters. The rice from Vietnam is expected to arrive in Indonesia in August and would directly be kept at Bulog warehouses," Sutarto said.
He said that the 500,000 rice will arrive in Indonesia through 20 seaports throughout the country, beginning from Lhokseumawe port of Aceh to that of Papua. Although imported rice has begun to enter the country, Bulog would continue to purchase rice from farmers in the country using the government-sanctioned purchasing price (HPP).
He said that if taken together with the imported rice, the stocks would be enough for seven months. Up to now, Bulog`s farmers` rice absorption had reached 1.359 million tons.
Some of the stocks will be used for market operations. Bulog has conducted operations every year. Sutarto said that in 2007, the volume of rice for market operations was 350,000 tons but in 2008 and 2009 it was 35 thousand tons and 15 thousand tons respectively while in 2010 it was 60 thousand tons.
The operations are needed to stabilize prices when the prices rise due to high demand or as a result of the act of rice wholesale traders who hoard rice for their interests.
In the current fasting month, there are rice price increases in certain regions which the minister of agriculture suspects to be caused by rice hoarders. "The present surge in rice prices could have been caused by hoarding by big-time traders," Agriculture Minister Suswono.
He said he suspected that whole-sale rice traders were hoarding the staple causing the rice price to exceed the projection made by the Central Bureau of Statistics (BPS).
The minister made the remarks when he made an impromptu inspection of the warehouse of a rice businessman in Tegal, Central Java, and a warehouse of the State Logistics Agency (Bulog,).
Suswono said he was told that rice hoarding cases had happened in a number of places in Tegal. The minister said national rice stock at present totaled 1.4 million tons while Bulog`s target was to procure 1.5 million tons at the end of the year.
Based on BPS`s forecast II, the country this year is expected to enjoy a rice production surplus of 2.4 percent or an increase by 1.17 percent from that in 2010.
"This is ironical. The price is increasing while there is a surplus. I suspect that traders are hoarding rice," the minister said.
Besides importing rice to increase stocks, the government is also considering exporting rice to South Korea. "We are still studying South Korea`s request for some 50,000 tons of rice. We have market there. The South Sulawesi governor has asked the agriculture minister to be allowed to export the rice," Cheif Economic Minister Hatta Rajasa said on Wednesday
Hatta said that the South Sulawesi government had about 200,000 tons of premium rice stocks which could not be absorbed by the market. It was organic rice with good quality.(*)
A014/HAJM
Reporter: Andi Abdussalam
Editor: Jafar M Sidik
Copyright © ANTARA 2011
