R

ice prices may decline by up to 10 percent this month as an increase in supply from several rice-producing houses will add to the rice stock in the market, State Logistics Agency (Bulog) estimated.

The agency planned to procure at least 500,000 tons of rice from West Java and Lampung, currently still in the peak of their rice
harvest seasons, Bulog chairman Sutarto Alimoeso said in Jakarta on Wednesday.

“With the additional supply from West Java and Lampung, the rice price can fall between 5 percent and 10 percent this month,” he said as quoted by detikfinance.com.

Sutarto added that, in the last four weeks, the rice price had been stable at between 10 to 15 percent above the base price.

Trade Ministry data showed that the average national price of medium-quality rice ranged between
Rp 6,500 per kilogram (75 US cents) and Rp 7800, about the same as the previous week.

Rice prices in some traditional markets in Greater Jakarta vary. At the Pasar Senen market, rice is
Rp 7,000 per kilo, while at Pasar Koja Baru market it is Rp 6,500, at Pasar Minggu market it is Rp 7,800 and at Rawamangun market it is Rp 7,000 per kilo.

Sutarto said that with the increased supply, the price was expected to decline or at least steady in the next two weeks.

According to Sutarto, as of now, his agency had secured contracts to purchase about 488,000 tons from the farmers, of which about 410,000 tons have already been delivered. He hoped the agency could buy 500,000 tons from farmers this month so the total price procurement could reach 916,000 tons in the first four months of the year.

He said Bulog planned to buy more rice from farmers this year because it may not be able to meet the import target.

Sutarto acknowledged that Bulog would be unable to meet the government’s expectation of importing 2 million tons in 2010 and 2011 due to, among other factors, bad weather such as high winds that often hamper shipments.

About 600,000 tons of the planned imports were delivered last year, with the other 1.5 million tons to be shipped this year.

Apart from the climate factor, the different loading and unloading capacities at each harbor receiving imported rice also hinders the delivery process, he said.

“The loading and unloading capacities at some harbors in several provinces such as Malahayati (Lampung), Ciwandan (Banten) and Kupang (East Nusa Tenggara) are not as high as the capacities in Tanjung Priok and Tanjung Perak,” he said.

Coordinating Minister for the Economy Hatta Rajasa recently said Bulog would need to procure at least 3.5 million tons of rice from domestic and overseas markets during February to April to keep the standby rice stock of at least 1.5 million tons.

“We ask Bulog to be proactive in the market to absorb [farmers’] rice to meet the people’s demands if necessary,” he said.

Bulog was also expected to gradually increase its rice stock to 2 million tons “to be safe”, Hatta said, as other nations were also “maximizing their food stocks”.

“We’re gradually heading in that direction [2 million tons annual rice stock]. I will see that rice procurement is realized this year, so Bulog must continually absorb farmers’ rice,” Hatta said. (lnd)