RI to import high-quality U.S. rice

JAKARTA (JP): Indonesia is prepared to import 10,000 tons of high-quality rice from the U.S. under the GSM-102 credit guarantee program, Minister of Food Ibrahim Hasan says.

Ibrahim told a meeting of editors and reporters here yesterday that the imported rice, due to its fine quality, would not threaten local rice producers.

"This has been approved by President Soeharto and a memorandum of understanding will soon be signed between the governments of the two countries," Ibrahim said.

He said the imported rice would likely only be sold at top- rated restaurants and hotels, and wouldn't prevent Indonesians from continuing to consume the inferior locally-produced rice.

Under the General Agreement on Tariffs and Trade (GATT), Indonesia is actually required to import as much as three percent of its domestic consumption of some 20 million tons of rice.

He said the world market supply was only about 12 million tons of rice, or about four percent of the world output, while Indonesia's domestic rice production reached 25 million tons a year.

"The world rice market is dominated by the U.S., Vietnam and Thailand, who supply 60 to 70 percent of the world market," Ibrahim said.

He therefore saw the plan to buy 10,000 tons of rice from the U.S. as an effective way of meeting GATT rules.

Ibrahim said the GSM-102 will guarantee US$200 million in loans for U.S. agricultural exports to Indonesia, such as rice, soybeans, cotton and meat. "The loans will mature within three years and the interest will not exceed 3 percent," he said.

"We are also proposing to import about 75,000 tons of soybeans," he said.

Ibrahim added that the imports would also benefit Indonesia in terms of soft-loan financing. (10)