RI to wait to sign rice import contracts

JAKARTA (JP): Minister of Industry and Trade Rahardi Ramelan said on Tuesday that the government would not sign any new contracts to import rice until May or June.

Speaking at a hearing with the House of Representatives, the minister said that the delay would protect farmers from falling rice prices.

"We will sign new import contracts only after April... because we will have good harvests. New import contracts may be signed either in May or June," he said during a hearing with House Commission III for agriculture, forestry, transmigration and food affairs.

The Central Bureau of Statistics predicted the country could produce 48.6 million tons of unhusked rice, or 29 million tons of milled rice, this year. Indonesia is likely to import between two million and three million metric tons of rice this year to meet demand, which is expected to reach 33 million tons of milled rice.

Rahardi said that the imported rice from the new contracts would likely arrive in August or September.

He predicted that the country's rice supply would be tight after the end of the harvest in April and in the May to June period when the country will see some big political events, including the general election.

Rahardi also said the government would not impose an import duty on rice for the time being so the price of imported rice would not disrupt local prices.

"We have agreed there will be no import tax on rice for the time being. The decision was made during the economic ministers meeting. The time to impose an import tax on rice has not come yet."

Rahardi said the government did not consider imported rice a threat to local rice, adding international prices of rice fluctuated sharply, making importers reluctant to do business.

"Rice imported by private companies is mostly top-quality rice and the amount is very limited. This will not disrupt the price of the medium-quality rice produced by our farmers."

The country liberalized regulations on the import of rice and other basic commodities as part of its September agreement with the International Monetary Fund. Rice imports used to be monopolized by Bulog.

Private companies have been allowed to import rice exempted from import duties since Sept. 22.

State Minister of Food and Horticulture A.M. Saefuddin earlier suggested 40 percent import duties on rice on the grounds that the price of imported rice was cheaper than locally produced rice, causing the price of local rice to fall.

Rahardi also denied that Bulog still controlled the sugar, wheat flour and soybean trade, saying that the agency would deal solely with rice once it had sold its remaining stocks of other commodities.

Rahardi said that the government imported 4.1 million tons of rice, 1.7 million tons of sugar, 3.2 million tons of wheat and 641,000 tons of soybeans in 1998.

He said Bulog's stock of sugar stood at 693,628 tons, wheat flour at 542,042 tons and soybean at 178,843 tons.

"The stocks will be released gradually onto the market so they won't disrupt market prices. Once they are sold, we will not buy commodities other than rice," he said. (gis)