Indonesia buys 300,000 tons of Thai rice

Indonesia buys 300,000 tons of Thai rice

BANGKOK (Reuters): Indonesia has bought 300,000 tons of Thai rice for nearby shipment with loading under way, trade sources said yesterday.

The purchases were of mostly 15 and 25 percent grade but price details were not available, they told Reuters.

Indonesia is expected to import between 1.5 million and 2.0 million tons of rice to cover a local shortfall caused by the adverse effects of the El Nio weather phenomenon.

Beddu Amang, chairman of Indonesia's State Logistic Agency (Bulog) has for several times insisted that Indonesia's rice stocks are sufficient enough despite the estimated drop in the rice production.

He said unhusked rice production was forecast to fall by 3.9 percent this year from 1996's output of 51.3 million tons.

Amang said Indonesia's rice stocks currently stood at 2.2 million tonnes, and that Bulog was supplying rice to the local market in a bid to keep prices within reasonable levels.

Planting of the main rice crop, which accounts for 50-60 percent of total annual production, had been delayed from October/November because of the drought.

"Sowing is usually completed by mid-November. But this year, it has barely begun," one trader said.

Although rains have begun to arrive on the main island Java, sustained rainfall was needed to restore parched growing areas.

"Yields will be lower because the land is parched, and farmers have not been fertilizing their fields during the drought," one trader said. "The government has said output will fall by 3.9 percent, but I think it will be double that."

The trader said he expected Indonesia to import between 1.5- 2.0 million tons of rice in early 1998 with the local crop not being ready for harvest until April.

"I don't think the government has enough rice stocks to carry it through April, especially because of the market operations by Bulog," he added.

Traders said there were rumors in the grains market that Bulog had already assigned a well-connected trading house to import 600,000 tons of rice.

"I heard that Bulog has already asked the company to import 600,000 tons of rice. So I expect imports to begin arriving in the first three months of next year," one trader said.

"But I don't expect Bulog to import more than three million tonnes like it did after the 1995 drought," he added. "One million tonnes is a real possibility."

Traders said Vietnam, Thailand and possibly Pakistan were likely sources for the imports.