Bulog needs $2.7b to import foodstuffs

JAKARTA (JP): The State Logistics Agency (Bulog) has announced it will need about US$2.7 billion in soft credit from Bank Indonesia to import essential commodities in the current 1998/1999 fiscal year.

The agency plans to import 1 million tons of sugar, 700,000 tons of soybeans, 4.25 million tons of wheat and 3.1 million tons of rice, agency chairman Beddu Amang said Tuesday.

Speaking in a hearing with the House of Representatives, Beddu said the agency would also need another Rp 5.4 trillion (about $385.4 million) in liquidity credits from the central bank to support its market operation program.

"We will need Rp 5.4 trillion and $2.7 billion in liquidity credit and soft loans from the central bank to finance the imports of basic commodities and to support its market operation," he told the hearing with House Commission VIII for state budget and finance, research and technology.

Beddu said the agency would continue to sell sugar and wheat flour below market prices.

He said Bulog currently sold rice at Rp 1,650 in its market operation, sugar at Rp 2,050 per kilogram, wheat flour at Rp 2,231 per kilogram and soybeans at Rp 1,800 per kilogram.

The agency previously sold the rice at Rp 1,200 a kilogram, sugar at Rp 1,800 a kilogram and wheat flour at Rp 1,200 a kilogram.

Beddu said the 86 percent increase in the price of wheat flour was because the government "was too slow in adjusting the wheat flour price with the international market and with the sharp fall in the rupiah value against the U.S. dollar.

"If I was the one who decided, I would have increased the wheat flour price a long time ago.

"The wheat flour price should be set at Rp 4,000 considering the continued fall in the rupiah value. But since the government has decided to subsidize Rp 1,800 per kilogram, we can sell it at Rp 2,200."

He said the agency registered a surplus of Rp 94 billion in handling the import and distribution of wheat and wheat flour in 1993/1994. Since then, Bulog had continued to suffer from a deficit.

"The deficit was due to the increase in the wheat flour price on the international market and the amount to be imported."

Indonesia relies on imported wheat and wheat flour to meet the demand of local bakery and biscuits industry.

Beddu said Bulog's rice procurement in the January-to-June period plunged 90 percent, to 126,716 tons from 1.6 million tons in the same period last year.

"It's the lowest level in 20 years. But don't worry, we are still receiving rice aid from other countries."

He added that Japan had pledged to supply 550,000 tons of rice in soft loans with a 30-year maturity and grant, Taiwan would sell 200,000 tons, China provide 250,000 tons in loans and Vietnam 10,000 tons. Thailand would also give 5,000 tons in a grant and 500,000 tons would come from the Islamic Development Bank.

Meanwhile, state port operator PT Pelindo II, which operates Jakarta's Tanjung Priok Harbor, said no ships carrying imported rice had docked at the port since July 1.

Pelindo's public relations chief Sudjarwo said that his company had not received any notification from Bulog on the arrival of rice-cargo ships at the port.

"Up to now, there are no plans for rice-carrying ships to arrive here this month."

He added that 1.18 million tons of imported rice had arrived in the port on 118 vessels since last November. (gis)