[Kabar-indonesia] Indonesia to import 210,000 tonnes of rice

[Joyo at aol.com]

also: Indonesia Econ Min: To Import 210,000 MT Rice

Indonesia to import 210,000 tonnes of rice

JAKARTA, September 1 (Reuters) - Indonesia will issue
permits to state logistics agency Bulog to import
210,000 tonnes of rice to maintain stocks, the chief
economics minister said on Friday.

Boediono said Bulog will hold an open tender to import
the grain soon after the permits are issued by the
government.

"The decision to import was taken because we have to
secure stocks as a series of disasters have caused our
stocks to fall to 350,000 tonnes," Boediono told
reporters on Friday.

"We also have to anticipate El Nino that may damage
crops."

He added the rice imports, a staple for the country's
220 million people, were also aimed at maintaining
local prices that have risen above the government's
ceiling price.

Rice imports are allowed if the government's stocks in
Bulog fall below the safety level of 1 million tonnes
or local prices of medium grade rice rise above 3,550
rupiah ($0.390) per kg.

The imported grain cannot be sold for public
consumption but is set aside as a buffer stock to curb
inflation.

At the moment, local prices for medium grade rice at
the distributor level are between 3,800 and 4,000
rupiah per kg.

Boediono said the government had allocated 390 billion
rupiah from this year's budget to purchase the grain.

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Indonesia Econ Min: To Import 210,000 MT Rice

September 1(Dow Jones) -- "We will import as soon as
possible, so that in the fasting month our stocks will
return to safe levels," Boediono added, but didn't
state a more exact timeframe.

The government will grant an import license to state
logistics agency Bulog to procure the rice and will
provide around IDR390 billion out of the state budget,
Boediono said.

However, Bayu Krisnamurti, deputy to the Coordinating
Minister for the Economy, said the proposed funding
will only be enough for 120,000-130,000 tons.

Funding for the remainder of the rice will likely be
sourced from commercial backers and Bulog's budget,
Krisnamurti said, without elaborating.

Following the imports, total national reserves will
rise to around 750,000 tons and the government's
central reserve stock held in Bulog warehouses will
swell to more than 350,000 tons, Krisnamurti said.

Normally, 350,000 tons is considered a safe inventory
level for Bulog reserves, and while data on current
inventory levels are deemed to be unreliable, the
planned imports are intended to bring stocks up to
slightly more than that level, Boediono said.

"We want to leave a margin, because some have
expressed fears that in the future, El Nino, or other
natural disasters may occur," he said.

"The government is preparing itself for shocks."

The government maintains the reserve stock in Bulog
warehouses to be used for emergency disaster relief
and "market operations."

Market operations, where reserves are released onto
local markets to cap sharp price rises, are the
government's preferred method of stabilizing domestic
prices.

However, the World Bank in a report earlier this year
urged the government to abandon this strategy, and a
current ban on imports by private traders, in favor of
an import tariff system, to prevent price instability
and wide discrepancies with regional rice prices.

The rice imports will be procured through an open
tender process, Trade Minister Mari Elka Pangestu
said.

The winner of the tender will be determined in about
14 days from the initiation of the tender process, and
rice shipments will likely be delivered in 20-25 days,
Krisnamurti said.

Meanwhile, Agriculture Minister Anton Apriyantono
addressed market concerns that prices on domestic
markets would be disrupted by the government' decision
to import.

"(Traders) don't need to worry that market prices will
be affected, as (the imported rice) will not be
released onto the market, but will be kept in Bulog
warehouses."

Rice prices at East Jakarta's Cipinang market,
considered the benchmark for domestic prices, are
currently stable around IDR5,000 a kilogram, officials
said last week.

This is somewhat pricey for buyers - often
impoverished villagers - who frequent local markets.
However the prices are beneficial to rice farmers, a
key part of Indonesia's massive agricultural sector.

The 210,000 tons of rice to be imported is expected to
be sufficient to maintain adequate reserve levels
until the end of the year.

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Joyo Indonesia News Service
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