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$5to $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 affectsprices. 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 localsupplies.
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)