Government must ensure rice supply distribution meets actual needs
Jakarta (ANTARA) - Sandy Pramuji, an analyst at NEXT Indonesia Center, believes the government needs to ensure that rice supplies are available in terms of quality, location, and sales channels that meet public needs, so that policies are not merely oriented towards the scale of national production and stocks.
According to him, the distribution of SPHP (Stabilisation of Supply and Price) and distribution interventions should be directed based on the conditions of each region, while the implementation of maximum retail prices (HET) must be accompanied by monitoring the cost formation from paddy to retail.
“At the same time, broken rice data needs to be separated more granularly based on region, specification, volume, and intended use so that the developments in the consumer and industrial markets can be read more accurately,” Sandy stated in Jakarta on Monday.
He added that with such an approach, claims of rice availability can truly be reflected in the prices and product choices encountered by consumers.
Sandy believes that it is not enough for the government to merely declare that Indonesia’s rice stocks are safe. He argues that the root of consumer-level pricing is far more complex than just the national availability of paddy and rice.
A recent report by NEXT Indonesia Center titled “Rice Surplus Anomaly” shows that the largest price deviations are actually affecting the nation’s four main rice granary provinces: West Java, Central Java, South Sumatra, and South Sulawesi.
Sandy explained that, collectively, 2025 BPS (Statistics Indonesia) data shows these four regions contribute approximately 16.5 million tonnes, or nearly half of the total national rice production.
Nevertheless, Sandy added that data from September 2026 shows rice prices in these areas have exceeded the Zone 1 HET, which is Rp13,500 per kilogram for medium rice and Rp14,900 per kilogram for premium rice.
“When rice prices soar even in provinces that are major production centres, it is a strong signal of unresolved cost pressures, ranging from the paddy level, milling, to the margins of retailers,” he said.
According to NEXT Indonesia Center, an in-depth analysis of the supply chain shows that the increase in consumer-level prices is triggered by a surge in production costs from the upstream sector.
In South Sumatra, for example, the Business Competition Supervisory Commission (KPPU) noted that the price of harvested dry paddy (GKP) at the farmer level has breached Rp7,700 per kilogram, well above the government’s purchase price (HPP) of Rp6,500 per kilogram. This condition directly impacts the rising capital costs for mills and suppliers.
In addition to high raw material prices at the farmer level, the increase in supporting operational costs, such as fuel, milling, and distribution, is driving price hikes.
Sandy noted that the distribution chain, which remains very long from collectors to modern retailers, causes price margins to swell further.
As a result, he said, both retail businesses and traditional market traders face a difficult dilemma as they are unable to sell rice within the HET limits without incurring losses.
Beyond issues in the public consumption rice sector, the latest NEXT Indonesia Center report also examines anomalies occurring in the broken rice market.
By regulation and quality level, rice with a high percentage of broken grains is sold at a much lower price than medium or premium varieties.
However, BPS data recorded unusual movements where broken rice prices occasionally exceeded medium rice prices during the 2024–2025 observation period, even surpassing premium rice prices in certain months at the milling level.
Sandy said this anomaly must be interpreted carefully because broken rice transactions are relatively small. In June 2025, broken rice accounted for only 1.21 per cent of the transactions observed by BPS, compared to 35.26 per cent for premium and 52.65 per cent for medium rice.
“Although the portion is small, its price increased by 10.44 per cent annually—the highest among all quality categories,” said Sandy.
According to NEXT Indonesia Center, the broken rice price anomaly reveals another side of the issue.
The fact that broken rice prices occasionally exceed premium rice cannot be immediately interpreted as a general change in the rice price structure. The transaction volume is relatively small, so the average price is easily influenced by changes in location, specification, and transaction volume.
Nevertheless, Sandy explained that industrial needs indicate that broken rice has its own market, which can cause its price to not always follow the hierarchy of consumer rice quality.
“The increase in broken rice prices could also be influenced by a combination of limited transaction volumes in the market and a surge in raw material demand from the industrial sector. This commodity is frequently used in food processing industries such as rice flour, vermicelli, and animal feed,” said Sandy.