Sat, 22 Mar 2003

Bulog says rice reserves enough for seven months

Adianto P. Simamora, The Jakarta Post, Jakarta

The State Logistics Agency (Bulog) said on Friday it had enough rice reserves to maintain price stability at home amid rising uncertainty on the international market as a result of the war in Iraq.

Bulog chairman Widjanarko Puspoyo said that the agency's rice reserves of about 1.4 million tons was enough for seven months.

Speaking to reporters on the sidelines of a workshop, he said that the above figure had taken into account some 500,000 tons of rice imports from Thailand and Vietnam.

"We have secured contracts to import some 500,000 tons of rice to anticipate the impact of the war in Iraq," he said, adding that 300,000 tons would come from Thailand and the remaining 200,000 tons from Vietnam.

Bulog's main mission is to ensure the stability of rice prices on the domestic market. If the price increases for whatever reason, including harvest failure or market speculation, Bulog releases its reserves to stabilize the price, and vice versa.

Rice is a politically sensitive commodity here as it is the main staple of the country's more than 200 million people.

Widjanarko acknowledged that it was now getting more difficult and expensive to purchase rice on the international market as other countries were also boosting their reserves due to the uncertainty created by the Iraq war.

He expected the war would not drag on for more than seven months.

The country's unhusked rice output is expected to reach some 52 million tons this year. This is roughly equal to 30 million tons of rice.

Bulog normally holds a buffer stock of around 3 million tons, both purchased on the local and international markets.

Indonesia briefly achieved self-sufficiency in rice in 1984, but is now one of the biggest rice importers in the world.

Meanwhile, Minister of Trade and industry Rini M. Soewandi said the country would have an adequate sugar supply over the next five weeks without having to import as sugarcane milling had just started.

"The sugar supply will be secure for the next five months as sugarcane milling will be underway at home," Rini told reporters.

The country's sugarcane milling normally starts in April and May.

But just in case, Rini said the country would import sugar from India and Thailand to help ensure adequate supplies at home.

"We will discuss the transportation problem with the shipping association to ensure the shipments arrive here," she said.

There have been worries that the war in Iraq would make importing sugar more difficult.

Indonesia is one of the world's top sugar importers, absorbing around 1.6 million tons last year.

The country's total sugar production is currently 1.7 million tons with annual consumption amounting to about 3.3 million tons.

Indonesia imported 2.1 million tons of sugar in 1999, 1.2 million tons in 2000 and about 1.6 million tons in 2001.

The ministry has authorized three state-owned plantation companies and PT Rajawali Nusantara Indonesia to import sugar to meet the country's needs and help increase the price of the commodity at the grower level.

Aside from the four companies, many private sector companies also illegally import sugar for the domestic market, but no data is available on these imports.