State procurement agency Bulog, which is tasked with stabilising the price of rice, Indonesia's most popular staple food, plans to buy more rice in anticipation of El Nino, its chief said on Wednesday. After receiving additional funding of 1 trillion rupiah, Bulog will build up the government's rice stocks by around 500,000 tonnes in 2009, bigger than an initially planned figure of 350,000 tonnes, said Mustafa Abubabar.
"For 2010, we proposed to the government to increase its rice stock by 500,000 tonnes (to 1 million tonnes)," he said, adding that the purchase must be done this year as the El Nino weather phenomenon may cut output in 2010. The latest report by Australia's Bureau of Meteorology, however, showed on Wednesday that the development of a potentially damaging El Nino pattern has not intensified in the past two weeks, though the odds remain in favour of 2009 being an El Nino year.
Abubakar said Bulog would focus on buying rice from the domestic market but may import as a last resort. Rice imports are tightly regulated in Indonesia with Bulog the only importer. Indonesia has an agreement to get supplies of 2 million tonnes from Thailand and Vietnam. Indonesia scaled back rice imports after it posted a surplus of more than 1.6 million tonnes last year, its first surplus in nearly two decades. The surplus may rise to 2.3 million-2.8 million tonnes this year on good harvests.
Abubakar also said that to build a bigger stockpile, Bulog will increase this year's rice procurement to 4.0 million tonnes from a previous target of 3.8 million. Procurement has now reached 3.2 million tonnes. Bulog has the task of distributing rice to more than 19 million poor families. It can also use the government stock to add supplies into the market, when necessary, to bring down prices.