T

he State Logistics Agency (Bulog) expects imported rice to start arriving from Vietnam in November to underpin depleting rise reserves, its top boss has said.

Bulog president director Djarot Kusumayakti said on Monday that the agency would soon proceed with the process of importing the rice from Vietnam.

'€œIf there is no rain by the end of this week, we will proceed quickly with the import plan. Vietnam has committed to exporting 1-million tons of rice and we'€™d like to see the rice stream in as soon as early November,'€ he said at the State-Owned Enterprises Ministry.

Djarot added that the committed amount initially stood at 1.5 million tons, but had been lowered to 1-million tons owing to the loading and shipment- capacity issues.

Bulog is finalizing the import plan following President Joko '€œJokowi'€ Widodo'€™s decision last week to bring in rice from the neighboring country.

As reported previously, Indonesia is facing a rice shortage as a result of prolonged drought due to the El Niño phenomenon, which poses a challenge to the government'€™s rice self-sufficiency target.

The government stated that it aimed to reach self-sufficiency in rice between the second and third year of the five-year administration, without factoring in the drought.

However, many have predicted that this year'€™s El Niño will last longer and its impacts will be more severe than that recorded by the world in 1997.

Meanwhile, Bulog said that crop failures reported in several areas had added risk to the already low reserves. As of Sunday morning, data from the agency said that the amount of reserves had only reached between 1.3 million and 1.4 million tons.

Half of the reserves was made up of rice from local farmers, which is absorbed and distributed by Bulog as part of its public service obligation (PSO).

'€œAbout 10 days ago, we still had reserves of 1.7 million tons. The figure has been declining,'€ Djarot said.

The latest figure is concerning because it is only sufficient to meet 10-day consumption since the country needs an average 2.5 million tons of rice for monthly consumption, according to Bulog'€™s observation.

No detailed information on the import costs was immediately available because Djarot said that the agency was still completing its total import calculation.

'€œWe are also looking at Thailand, Myanmar and Pakistan for additional import sources, but have not reached a definite agreement with them.'€

Separately, Bank Central Asia (BCA) economist David Sumual predicted that the government would face a tough challenge in terms of price since almost all Asian countries were facing the same drought issue.

'€œIt should'€™ve been more prepared. The decision to import came quite late and now all countries are competing to acquire rice,'€ he said.

David warned that failure to manage rice availability would lead to soaring food prices and rising inflation, possibly higher than 3 percent by the end of the year.

'€œHigh inflation may prevent us from seeing lower benchmark interest rate in 2016. Other macroeconomics variables will change as well.'€

The government has set its full-year inflation rate target at 5 percent, while Bank Indonesia estimates that the rate will hover between 3 percent and 5 percent.

According to data from the Central Statistics Agency (BPS), year-to-date and year-on-year inflation rates stood at 2.2 percent and 5.1 percent, respectively, by September. Food remained the biggest contributor to the inflation figure, the data shows.