FAO warns of worsening RI food crisis

FAO warns of worsening RI food crisis

SINGAPORE (Dow Jones): Indonesia's food situation has worsened to such an extent that it needs to import more rice while its production is set to fall, according to an Oct. 6 report by the crop and food supply assessment mission of the Rome-based UN's Food and Agriculture Organization and the World Food Program.

The assessment, conducted during Sept. 7-Sept. 25, is a follow-up to an April mission.

Indonesia's rice import forecast for April 1998 to March 1999 has been boosted to 5.145 million metric tons, up 47% from the April forecast of 3.5 million tons.

As of mid-September, Indonesia's national logistics agency Bulog has imported 2.42 million tons and contracted another 525,000 tons.

Confirmed food assistance pledges stand at 765,000 tons, of which 600,000 tons will come from Japan.

This leaves a deficit of 1.43 million tons, of which bilateral discussions are underway for some 1 million tons, said the FAO/WFP team.

Owing to a smaller second rice crop, Indonesia's total 1998 paddy output is now forecast at 45.38 million tons, down 5% from the previous forecast.

This estimate, some 4 million tons or 8 percent lower than the previous year's reduced harvest, will be the lowest since 1991.

The fall in second-rice-crop output is due to a planting delay of one to two months, which had reduced productivity; pest attacks; and the dramatically reduced use of fertilizers and high-cost pesticides.

Indonesia's corn production is forecast at 9.627 million tons, up from 8.77 million tons the previous year. Owing to lower corn demand from the poultry industry, Indonesia has no need for corn imports this year, said the FAO/WFP report.

Indonesia's soybean production is projected at 1.467 million tons, up from 1.357 million tons a year ago, while its cassava output is forecast at 16.391 million tons, up from 15.134 million tons in 1997.

Indonesia's 1998-99 wheat import forecast is still pegged at 4.016 million tons, though the FAO/WFP report said wheat demand may be affected by the removal of subsidies and a change in relative prices.

So far, some 1.5 million tons of wheat imports have been delivered and an additional 500,000 tons are expected in further bilateral assistance by January 1999, said the report. It added that talks on a further one million tons of wheat imports through bilateral assistance over the next two years are going on.

Although it is too early to project the volume of Indonesia's main 1999 rice crop, which is planted from Oct. 1998, the FAO/WFP team said favorable weather, cheaper labor and a government program to boost rice output should contribute to a recovery in output.

But it said international assistance will still be needed for food and agriculture rehabilitation.

The FAO/WFP team, which visited 18 of Indonesia's 27 provinces, surveyed areas that typically account for 95 percent of the country's rice production.