Indonesian Political, Business & Finance News

2002 rice import seen at 1.3 million tons

| Source: JP

2002 rice import seen at 1.3 million tons

Adianto P. Simamora, The Jakarta Post, Jakarta

Indonesia would only need to import about 1.3 million tons of
rice this year despite the threat of the drought-inducing El Nino
weather phenomenon, a senior official at the Agriculture Ministry
said on Monday.

"Even with El Nino, the country's total rice importation will
not surpass ... 1.3 million tons," Kaman Nainggolan director for
planning and finance at the ministry told The Jakarta Post.

He made the statement in response to a forecast made by the
United States Department of Agriculture (USDA) that Indonesia
would import some 2.5 million tons of rice in 2002, making the
country the world's largest rice importer. The Kompas daily
newspaper, which quoted the figure, did not explain the reason
behind the surge in importing rice.

"We welcome the USDA forecast as a worthy input, but frankly
speaking, I believe such a figure is too high," said Kaman.

He said the ministry was optimistic that this year's unhusked
rice production target of 53 million tons would be achieved.

The figure is equal to around 33 million tons of milled rice
or roughly the same as the national rice consumption level
annually.

Kaman said that a Rp 40 billion (about US$4 million) 100-
hectare paddy field project financed by the ministry was expected
to be harvested in August, lending more credibility to the 2002
rice output target.

He also said that there was a strong chance that the El Nino
weather phenomenon would not occur this year as indicated by the
state meteorological agency (BMG).

He said that without El Nino, the country would only need to
import around 500,000 tons of rice.

Analysts have expressed worries that the country would have to
import a huge amount of rice due to the likely return of El Nino.

The weather pattern, which occurs once every two years to
seven years, last hit Indonesia during 1997, when it caused
severe drought and serious damage to agricultural production.

In 1997, said Kaman, Indonesia was forced to import more than
5 million tons of rice due to the combination of El Nino and the
influence of the economic crisis.

But he said that the condition now was very different with the
economy already moving toward recovery.

Rice is the staple food of many Indonesians. Missing the
production target will force the country to import rice to meet
domestic demand.

Chief of the State Logistics Agency (Bulog), Widjanarko
Puspoyo, said earlier that it would import more than 1 million
tons of rice this year to anticipate a possible drop in domestic
output due to poor harvests and El Nino.

Widjanarko said the country's rice production had been
steadily declining since 1998 due to the shrinking total crop
area.

Data from the Central Bureau of Statistics (BPS) showed that
the country's rice imports reached 6 million tons in 1998. This
figure fell to 4 million tons in 1999, 1.5 million tons in 2000,
and 1.5 million tons last year.

The effect of the recent floods and El Nino are predicted to
cut back unhusked rice production by between 5 percent and 10
percent.

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