Indonesia may import rice from India

Indonesia may import rice from India

Reuters, New Delhi

Indonesia is considering rice imports from India in hopes that the world's largest edible oil consumer will reduce import duties and buy more of its palm oil, the country's trade minister said on Wednesday.

"At this moment we are already buying Indian wheat. We are looking at the possibility of rice," Indonesian Trade Minister Rini Sowandi told reporters.

"We do hope India will look into the possibility of time to time reducing the tariffs," she said before a meeting with her Indian counterpart in New Delhi.

India annually sells around 200,000 tons of wheat to Indonesia, but very little rice is being shipped.

India is desperately trying to cut its grains stocks which are expected to increase to 75 million tons by April.

India's palm oil imports have fallen since New Delhi imposed a steep import duty of 75 percent on crude palm oil (CPO) and 85 percent on refined palm oil in its federal budget last February. The duties compare with 45 percent for crude soyoil and 50.8 percent on refined soyoil.

Indonesia and Malaysia, the world's leading palm oil exporters, have been lobbying with India to have a "level playing field" by bringing palm oil duty at par with soyoil.

Palm oil constituted 60 percent on India's total edible oil imports in 2000/01 (November-October), down from 68 percent a year ago. But during the same period soyoil imports rose to 31 percent from 15.3 percent.

Sowandi said Indonesia was looking at the possibility of a barter deal with India on railway projects and coal.

"We are looking at the possibility of Indian railway companies to help us in setting up railways in south Sumatra and barter trade with coal," she said.

Indian Railway Construction Company (IRCON) is in talks to set up a 1,500-km (937-mile) rail-network project linking north Sumatra to southern Indonesia.

She said Indonesia also wanted to import technology for setting up palm oil processing plants and boost its share of oil exports to India.

"India has been quite successful in developing palm oil processing plants while we are in need of these products because our plantation is now starting to mature," she said.

"At the same time India will provide us with more market for processed palm oil," she said.