The country’s rice stock is sufficient to meet demand until the end of this year despite a possible drop in production as a result of bad weather within the next few months, a senior government official has said.
State-Owned Enterprises (SOEs) Minister Mustafa Abubakar said on Wednesday that the government was going to increase rice stocks at the State Logistics Agency (Bulog) by 400,000 tons to anticipate the possible drop in rice production due too high rainfall.
Speaking to journalists following a coordination meeting on food stability at the Coordinating Economic Ministry’s Office, the minister said that the Bulog rice stock should not be maintained at least at 1.5 million tons to ensure sufficient supply.
As of August, Bulog’s rice stocks reached 1.4 million tons and it is expected they will be increased to 1.8 million tons after the addition of the proposed 400,000 tons.
Mustafa said the government would increase Bulog’s rice stocks by buying from farmers in several rice production areas.
Rice harvests will be still going on in some provinces, such as South Sulawesi, South Sumatra, East Java and Central Java.
Mustafa said that the rice price had decreased in the last few weeks thanks to market interventions by the government and prime commodities bazaars held for several days up to two days before Idul Fitri with the support of SOE’s corporate social responsibility fund.
“[The rice price] has increased by only 2 percent, lower than the 4.3 percent increase in August,” he said.
However, this price was still not satisfactory, according to Coordinating Economic Minister Hatta Rajasa. “It’s still quite high,” he told journalists on Wednesday.
According to the Central Statistics Agency (BPS), rice and electricity were two biggest contributors to August’s inflation figure which reached 0.76 percent.
In an announcement last week, BPS revealed that rice contributed 0.20 percent to August’s total inflation and electricity 0.35 percent. In August, the price of rice had increased significantly, by 4.3 percent, contributing to a higher rate of inflation during that month.
According to the BPS, the highest increases in rice prices were recorded in Cirebon, West Java, and Gorontalo, reaching 13 percent each, followed by Sukabumi, West Java, at 11 percent.
“We would see much lower rice prices after the Idul Fitri festivity,” Mustafa added.
Hatta said it would be important for Indonesia to increase its rice stocks as much as possible due to the ongoing seasonal anomalies that might cause harvest failures next year, leading to possibly very high inflationary pressures on staple food prices, especially rice. (ebf)
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