RI to wait to sign rice import contracts

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)