No price hike expected despite 2.7% crop drop

JAKARTA (JP): The expected 2.7 percent decline in rice production this year will not raise prices because the National Logistic Agency (Bulog) guarantees adequate supplies, the agency's chairman, Ibrahim Hasan, said.

Ibrahim, who is also State Minister for Food, told reporters here late on Tuesday that the agency will withdraw 650,000 tons of rice currently borrowed by other countries.

"The Philippines will deliver 200,000 tons of rice next month. Other borrowing countries such as Cuba and Zanzibar will repay later," Ibrahim said.

He said Bulog is currently holding reserves of 1.1 million tons of rice.

If the reserves and the repayment of rice from the borrowers does not meet the demand on the domestic market, the agency will import rice from other Asian countries under a counter-trade scheme, he said.

Vietnam has agreed to supply Indonesia with 250,000 tons of rice in return for fertilizer, he added.

This year's long dry season is expected to affect the country's rice harvest. Minister of Agriculture Sjarifudin Baharsjah said last week the drought has affected 189,253 hectares of rice fields, of which 33,286 hectares have been destroyed.

Production

This year's rice production of unhusked rice in the country, is estimated to reach only 43.31 million tons or 2.7 percent less than the 47 million tons projected earlier this year.

Minister Ibrahin said that to stabilize rice prices, Bulog has started selling the staple in towns where supplies have been affected by the drought.

However, according to Bulog research, rice prices continued increasing yesterday in Jakarta even though the agency had intervened by supplying 700 tons of rice.

Some high-quality rice types, such as Cianjur kepala, sold at Rp 1,142.95 per kilogram, compared to last week's price of Rp 1,100.

Sources at the Jakarta office of Bulog said the increasing prices could be the result of speculations by some traders.

"They (traders) seem to keep rice in warehouses with the expectation that prices will continue to increase in the coming weeks," said a source who requested anonymity. (als)