Australia may export rice to Indonesia

Australia may export rice to Indonesia

SYDNEY (Reuters): Australia is negotiating its first major sales of rice to Indonesia in 20 years.

With Indonesia's 1998 rice crop seriously depleted by El Nio- inspired drought, Australia was negotiating with the Indonesian government agency Bulog for first exports of rice, the Ricegrowers Co-operative told Reuters yesterday.

"We are indeed speaking with Indonesia, to the agency Bulog, we haven't finalized anything yet," the co-operative's manager commodities markets Robert Nelson said.

Australia was a regular exporter of rice to Indonesia 20 years ago before it achieved self-sufficiency as the result of economic progress which produced the means for it to buy more fertilizer.

The drought of 1997 and 1998, however, has seriously diminished Indonesia's output of rice this year.

A resumption of sizable export quantities of rice to Indonesia would represent a breakthrough for Australia.

Australian rice officials have complained that exports to Indonesia had been effectively blocked by Bulog.

A reply from Bulog was expected reasonably soon, Nelson said on Friday.

"It's a current issue so hopefully in the near too distant future," he said.

Nelson would not disclose likely tonnages in an Australian rice sale to Indonesia.

Drought had left the country with a reported rice shortfall of three million tons to five million tons of rice, he said.

It was possible that rice exports to Indonesia could be financed by Australian government lines of credit, he said.

Japan was also likely to donate between 500,000 tons and one million tons of a combination of Japanese and foreign rice, possibly including Australia, he said.

Australia sold a small quantity of 12,000 tons of broken rice to Indonesia last year, but that business ceased as a result of Indonesia's currency crisis, Nelson said.