Rice exports allowed under new ministerial regulation

Novia D. Rulistia ,  The Jakarta Post ,  Jakarta   |  Wed, 04/16/2008 12:31 PM  |  Headlines

The government on Tuesday issued a regulation appointing the State Logistics Agency (Bulog) as the sole exporter of rice and setting a minimum three million tons annual rice production surplus as a prerequisite for exports.

"The regulation is among our instruments to maintain the stability of domestic rice prices and stocks," Trade Minister Mari Elka Pangestu said in Jakarta.

Indicators for export eligibility, Mari said, not only include a minimum three million tons rice production surplus, but also domestic rice prices.

The price indicator, she said, has not been decided but will correspond with the targeted price in the government's staple food price stabilization program.

"The price is currently at between Rp 4,000 for the cheapest type of rice and Rp 6,000 (about 65 U.S. cent) for the medium type. We may use that as the standard," she said.

Under the new regulation, Mari said, private companies can still export glutinous rice, but only with the consent of the ministry's domestic trade directorate general.

"With the current high international prices, our rice becomes very competitive, but we don't want to be hasty by sending the rice overseas. We want to secure the domestic stock until the second harvest period between May and June."

Mari said the new regulation also demanded rice imports be carried out only if national stocks under Bulog were below one million tons.

According to Bulog, its rice stock currently stands at 1.3 million to 1.4 million tons, which should be sufficient for the next four months.

It expects stocks to reach 2.43 million tons as the country's total rice production is projected to grow by 5 percent from 33 million tons last year.

Throughout last year, Bulog was able to stock 1.76 million tons of rice, which was not sufficient to control soaring prices in the market that later prompted the import of 1.2 million tons.

Director general for international trade Diah Maulida said rice imports could only be conducted two months before, during and a month after the harvest season.

"Our team will evaluate this to determine whether we will expand or shorten the timeframe to find the most suitable time for imports," she said.

Mari said before conducting any export or import activities, the government would ensure the verification process at ports during the loading and unloading to avoid illegal shipments.

The verification will include the type of rice, its volume and the name of the exporters and importers.

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