Bulog's rice procurements reach 1.1m tons<\/p>\n
JAKARTA (JP): Domestic rice procurements by the National
\nLogistics Agency (Bulog) reached 1.1 million tons during the
\nfirst five months of the current fiscal year, indicating a 45.71
\npercent increase from the beginning of the year, in April.<\/p>\n
\"The rice procurements are the largest during the last two
\nfiscal years, despite the fact that many problems hit our
\nagricultural sector this year,\" Bulog Chairman Beddu Amang said
\nat a hearing with the House of Representatives' Commission VII --
\ndealing with finance, trade, cooperatives and logistics -- here
\nyesterday.<\/p>\n
He said the problems included a shortage of fertilizers on the
\ndomestic market, the decrease of rice fields and floods and pest
\nattacks in a number of rice-growing areas.<\/p>\n
With the rice procurements of 1.1 million tons, Bulog's total
\nstocks of rice, the main staple of the country, have now reached
\n2.7 million tons, adequate for food security until the upcoming
\ngeneral elections next year.<\/p>\n
Beddu said, however, that during the current fiscal year, his
\nagency will be able to procure only 1.4 million tons of rice, far
\nlower than the target of two million tons.<\/p>\n
He said the lower procurements of rice will be caused in part
\nby the fact that the rice price on the market will be higher than
\nthe agency's buying price, causing farmers to prefer to sell
\ntheir products at marketplaces.<\/p>\n
Bulog, established by the government in 1967, is charged with
\nmaintaining the price stability of basic food commodities such as
\nrice, sugar, flour and soybeans through buffer-stocking and
\nmarket interventions.<\/p>\n
During the first five months of the current fiscal year,
\nprocurements of sugar reached 1.04 million tons, flour, 1.4
\nmillion tons, soybeans, 376,556 tons and crude palm oil (CPO)
\n90,000 tons.<\/p>\n
Beddu Amang noted that in an effort to arrest the rising price
\nof cooking oil on the domestic market, Bulog will import 20,000
\ntons of cooking oil from Malaysia this month.<\/p>\n
\"The first shipment of the imported coking oil was made on
\nSept. 8,\" he told the press after the hearing.<\/p>\n
He said that the imported cooking oil will be used by the
\nagency for market intervention to press down the current price of
\nRp 1,500 (65 U.S. cents) per kilogram to at least Rp 1,400.<\/p>\n
He said that the recent increase in the cooking oil price was
\ncaused by the shortage of crude palm oil supplies, a raw material
\nfor making cooking oil.<\/p>\n
\"CPO producers have been increasing their exports over the
\npast few months on fears that the price of CPO on the domestic
\nmarket will continue to decrease,\" said Beddu.<\/p>\n
He said that the increase of CPO exports was also caused by
\nthe increase of CPO prices on the international market, from
\nUS$477 per ton in July to $530 per ton late last month, and the
\ntemporary abolishment of export tax for CPO during last month.<\/p>\n
The government imposed an export tax on CPO products to
\nprotect the domestic cooking oil industry. The tax, however, is
\nautomatically abolished if prices on the world market fall to
\nbelow $434 per ton for CPO and to $500 per ton for olein or
\ncooking oil.<\/p>\n
Bulog estimates that the shortage of CPO supplies on the
\ndomestic market will continue in the next few months, in
\nconformity with the upward trend of exports.<\/p>\n
The upward trend of exports is possible because most domestic
\nCPO producers have already committed themselves to fulfilling
\ntheir future contracts.<\/p>\n
\"Considering the CPO supply shortage, an export tax is still
\nneeded to guarantee the raw material for our industry,\" Beddu
\nsaid in commenting on analysts' view that the export tax should
\nbe abolished.<\/p>\n
Also to discourage the exports, Bulog suggested that the
\ngovernment apply export tax on CPO based on the bill of loading
\nand not upon the export notification date, as currently applied.
\n(13)<\/p>",
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