Indonesia unlikely to import rice in early 2016

11 Aug, 2015

Indonesia's Bulog is unlikely to import rice this year but overseas buys are possible by March or April 2016 due to delays in planting caused by a dry El Nino weather pattern, the head of the state food buyer said on Monday. Bulog currently has 1.5 million tonnes of rice stocks, President Director Djarot Kusumayakti told Reuters, adding the agency had bought 1.85 million tonnes from domestic suppliers in 2015, lower than a 4 million tonne target.
El Nino, a warming of sea-surface temperatures in the Pacific, can lead to scorching weather in Asia and East Africa but heavy rain and flooding in South America.
Indonesia is expected to face moderate El Nino conditions from July to November, affecting provinces from Sumatra to eastern Indonesia, although the weather pattern could strengthen from September to December.
Asked if rice might be imported in 2015, Kusumayakti said: "I believe no."
"But the problem is that the El Nino forecast seems to be getting stronger," he said. "This will disturb 2016 stock.
"If the rainy season starts in December, planting will be delayed," said Kusumayakti, who has only been in the job since June, adding the agency was currently in talks with rice traders in Thailand, Vietnam and Myanmar.
Analysts have forecast that Indonesia will import 1.6 million tonnes of the staple grain this year due to soaring prices at home and the El Nino threat.
After the worst US drought in 56 years drove global prices of soybean and corn to all-time highs in 2012, Indonesia said it would gradually expand Bulog's purchases beyond rice to build bigger stockpiles of beef, corn, sugar and soybeans.
Since coming to power last October, President Joko Widodo has aggressively pursued self-sufficiency in various foods as part of an increasingly nationalistic approach to protecting farmers, curbing state imports of rice in a country where private buying from overseas has been largely banned for decades.
Widodo has been pushing for an even bigger role for Bulog in food imports and domestic price controls, and in June he signed a decree allowing the government to cap prices of staple foods during peak demand periods.
Looking ahead, Kusumayakti said Bulog would probably be able to buy and sell shallots, chillies and cooking oil in future.
Last month, Indonesia slashed the initial number of cattle import permits to 50,000 for the third quarter and halted imports of corn used in feed mills.
As domestic beef prices rise, Bulog has been given an import permit for 50,000 live cattle, but Kusumayakti said his agency would need more than half the country's total annual import quota to achieve the goal of price stability.
According to industry estimates, around 720,000 live cattle were brought in last year.

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