Government to increase unhusked rice prices

Government to increase unhusked rice prices

The government will raise the basic price of unhusked rice around
the same time as it increases the price of oil-based fuels in
order help farmers cope with the effects of the fuel price hike.

Minister of Agriculture Anton Apriyantono said the government
would increase the price to Rp 1,530 (15 U.S. cents) per kilogram
from the current Rp 1,330, probably next month.

"The higher price of unhusked rice is expected to help farmers
cope with the impact of the fuel price increases," he said after
meeting President Susilo Bambang Yudhoyono on Tuesday.

Anton said the government was not concerned about the impact
of the rise on inflation as fluctuations in the price of rice had
little impact on the overall inflation figure.

Minister of Trade Mari E. Pangestu said last week that food
prices would probably increase by more than 10 percent after the
government increased fuel prices early next month, and
transportation and production costs would also increase
dramatically.

She added that the figure was a preliminary estimate based on
the effects of the average 29 percent increase in fuel prices in
March, which drove food prices up by between 5 percent and 10
percent.

The central bank has said that with the upcoming fuel price
increases, the country's inflation rate will be above 9 percent
this year.

However, analysts estimate that with increased rice prices,
inflation level could rise above 10 percent for the full year as
rice is the country's staple food. -- JP