Rahardi cancels planned tender for rice imports

Rahardi cancels planned tender for rice imports

JAKARTA (JP): The State Logistics Agency (Bulog) announced on
Tuesday that it had canceled a plan to hold a tender for rice
imports due to a sudden rise in international prices.

Minister of Industry and Trade Rahardi Ramelan, who is also
Bulog's chairman, said rice prices on the international market
rose by between US$5 to $10 per metric ton following the recent
disclosure of Bulog's plan to import rice.

"Indonesia, as the biggest rice buyer, is a price determiner
in the international market. Any plan or move we make about
importing rice affects prices. So we must be very careful because
we do not want the price to go up again," he said in a hearing
with the House of Representatives Commission III for agriculture,
forestry and plantations, and food affairs.

He said that China had stopped trading its rice on the
international market following the report that Indonesia was
about to import rice in a move to lift prices.

Rahardi said Indonesia would need to import at least two
million tons of rice in the 1999/2000 fiscal year to meet
domestic demand.

He said Bulog would soon resume importing rice in anticipation
of declining domestic supplies in the coming months.

"But I cannot reveal the amount to be imported or when imports
will be made. Once again it's a sensitive matter."

Rahardi said the agency would use a loan provided by the
Islamic Development Bank (IDB) to procure rice through a
tendering process.

He said IDB had provided $190 million in financial aid, of
which $63.37 million had been used to import 277,000 tons of rice
in the last fiscal year.

"With the remaining $126.63 million, we can procure around
500,000 tons of rice from the international market at $250 per
ton," he said.

Rahardi added that the government had also secured 115,000
tons in rice aid through the PL-480 program of the U.S
government.

"We have also obtained $200 million in export credit from the
Chinese government to buy rice from that country and we have also
secured 200,000 tons in rice aid from the Taiwanese government,"
he said.

Bulog announced last week that it would open a tender for rice
imports later this month. However, the agency said the quantity
of rice in the tendering process had not yet been set because it
was still assessing local supplies.

Imports will be made from Egypt, Pakistan, Vietnam, Thailand,
Myanmar, China and Taiwan.

Rahardi said Bulog had over 910,000 tons in rice stocks which
were imported in the 1998/1999 fiscal year. The stocks have
started to run out and the agency needs to replenish its
supplies.

He said rice stocks were expected to decrease in September and
December due to the low harvest season.

Additional supplies will enter the market only in January when
the main harvest season starts, he said.

Rahardi said the agency had procured about 1.5 million tons of
rice from local farmers, part of the two million ton targeted for
this year.

The agency concluded import contracts for 5.3 million tons in
the last fiscal year, which ended in March, but only 4.8 million
tons have been delivered due to difficulties in payment. The
remaining will be shipped in this fiscal year.

More than half of the imports was financed by foreign grants
and loans.

Rahardi said the agency had 53,000 tons of sugar, 80,000 tons
of wheat flour and 96,000 tons of soybeans in stock as of July
12.

"The stocks will be released gradually onto the market. We
expect the stocks will be exhausted by September since by then we
will no longer handle the trading of those commodities," he said.
(gis)