"There are many steps to importing rice. One can get an idea by taking a look at the agency`s rice stocks," Bulog director Sutarto Alimoeso said at a press conference here on Thursday.
Based on the agency`s performance reports, Indonesia's rice stocks reached 2,276,505 tonnes last year, which will be enough to fulfil domestic demand for the next eight months.
"At any given point in time, Bulog should always have at least 2.2 million tonnes of rice. Therefore, we must plan to import rice when there is a chance of that level getting breached," Sutarto explained.
"Changing rice prices are also one of the important factors. Rice prices are determined by supply and demand," he noted.
"They also affect the government`s base buying price (HPP) for rice. It's the price that the agency pays to the farmers, which is currently Rp6,600 per kilogram. For example, during the dry season, which is usually the February-March period, the price can reach up to Rp7,600 per kilogram for medium-quality rice," Sutarto stated.
"That`s the wholesale price. At local markets, the price could reach Rp900 to Rp1,000 per kilogram," he pointed out.
Another factor that the logistics agency considers while planning to import rice is rice production, which is dependent on weather conditions. Crop failures due to famines would affect rice production, Sutarto said.
"If production is good, domestic procurement will also be nice and we will not need to import. If we can meet our own needs, then we don't need to import," he added.
Annual domestic rice procurement last year reached 3,664,240 tonnes, up 210 percent from 1,742,480 tonnes in 2011.
"In order to maintain that level, the agency must use various strategies, such as push-and-pull, ant networks, incentives, and 'on-farm'," Sutarto said.