Indonesia's state procurement agency Bulog aims to lift its rice stocks to 2 million tonnes by the end of the year via domestic procurement because of expectations for higher local output, said its president director on Monday. Indonesia earlier this month ordered Bulog to boost its rice stocks to 2 million tonnes from 1.5 million, in the latest sign that governments are concerned about rising food prices and growing inflation.
The government has allowed Bulog to import rice this year to maintain its stock level at 1.5 million tonnes, and it had not been clear if the extra stocks would come from further imports or from local supply. "Rice production from this year's main harvest is expected to increase so Bulog can buy from the domestic market more than last year," Bulog's Sutarto Alimoeso told Reuters.
Bulog surprised markets last month by buying 820,000 tonnes or nearly five times as much rice as expected, lifting regional prices. The government then suspended rice import duties in a move that signalled it could be looking to stockpile more. The agency has been struggling to buy rice locally because local prices increased above the government's procurement price of 5,060 rupiah per kg. The country's main rice harvest will run from March to May/June and then be followed by a smaller harvest in August-September. But production could reach as high as 70 million tonnes of unmilled rice, the ministry has said. Bulog will use the grain stocks to secure supplies for a subsidised rice programme and in the event of natural disasters, Alimoeso said.
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