Indonesia plans to announce a new policy soon to control rice exports and secure domestic stocks, amid soaring prices for the grain, a senior trade ministry official said on Thursday. Rising global rice prices have fuelled concern of unchecked exports of the staple cutting into domestic supplies in the country of more than 220 million.
Last week, the government appointed state procurement agency, Bulog, as the sole agent allowed to export rice in a bid to control exports. "The policy will only allow Bulog to export medium quality rice," Diah Maulida, director general of foreign trade at the trade ministry said.
But higher price, premium quality rice and special rice such as glutinous rice could be exported by private traders and Bulog, she added. "Currently, Indonesia only exports premium rice and glutinous rice."
Offers of medium-grade 15 percent broken rice from Thailand, seen as a benchmark for the market, have more than doubled to $741 a tonne, free-on-board, from $360 a tonne at the end of 2007. Rough rice futures on the Chicago Board of Trade surged to a record high, gaining 18 percent to $20.15 per hundredweight by 0554 GMT in Asia on Thursday on supply worries.
Last week, major rice exporters Vietnam and India said they would curb overseas sales to combat food inflation, a move that threatens to increase global anxiety over staple food supplies. Mustafa Abubakar, Bulog's head, said it might not export rice any time soon since stocks were still insufficient to meet domestic demand.
He did not say specify the level of the agency's stocks, but the government has said Bulog may export the grain if its stocks exceed 3 million tonnes this year. Bulog has said it aims to buy 2.43 million tonnes of rice this year for its subsidised rice programme, up from 1.76 million tonnes in 2007.
Bulog buys rice from farmers and imports the grain if necessary to stabilise local prices. It is also responsible for distributing rice to the poor at 1,600 rupiah a kg.
Indonesia's rice production is estimated to be about 2 million tonnes higher than consumption this year thanks to improving yields and an increase in the harvested area, but officials say that is not enough to guarantee national food security.