Reuters, Bloomberg & JG, Jakarta – Heavy rains have hit rice production hard, forcing Indonesia, a top rice producer, to import the crop for the first time since 2007, the State Logistics Agency (Bulog) confirmed on Friday.

Traders and market watchers say the purchases, along with surprise imports by China and the massive flooding in Pakistan, are raising concerns about the rising prices of rice at a time when other grain prices have also risen sharply. This has stoked fears of serious food inflation.

Indonesia and the Philippines, the world's top rice importer, are looking to buy over 2.2 million tonnes of rice from Vietnam, a newspaper reported on Friday.

The Vietnam Economic Times newspaper said Indonesia was looking to import 700,000 tonnes, in addition to the 500,000 tons reported earlier this week. According to the newspaper, the Philippines wants to buy between 1 million and 1.5 million tonnes of rice.

Sutarto Alimoeso, Bulog's president director, confirmed reports that Bulog was preparing to buy large amounts of rice from Vietnam and Thailand. However, he cited amounts that conflicted with reports from traders and government agencies in those countries.

"We are exploring the possibility of importing 300,000 tonnes from both Vietnam and Thailand and the process is nearly finished," he said, when asked about the import figure cited by the Vietnam Economic Times.

Rice is Indonesia's most important staple and the country has been self-sufficient for the last two years. It last shipped in 1.2 million tons of white rice for consumption in 2007, mostly from Vietnam and Thailand.

Bulog, which manages the government's stockpiles, buys the crop from farmers during harvests and sells the grain later to help keep prices stable.

"We cannot buy sufficient supplies from farmers because longer-than-normal rains have reduced the yield, which led to a decline in output and quality," Sutarto said.

Indonesia, the world's third-largest rice producer, imports small amounts of specialty rice every year. Sutarto said that Bulog would continue to buy good-quality rice from farmers even while it imports from other countries.

He had met with traders and officials from Thailand and Vietnam last week and discussed the import plan.

La Nina, marked by colder ocean temperatures, has brought heavier-than-usual rainfall to parts of Australia and Asia this year, including Indonesia. Industry groups have blamed the rains for lower output or missed forecasts for cocoa, tin, palm oil and coal.

The surprise imports and the size of Thailand's upcoming harvest will be the dominant issues at industry conferences in Singapore and Phuket next week. The move is expected to push up Asian rice prices even more, as supply tightens in Vietnam.

"People will be trying to figure out the supply and demand situation after we saw additional demand from Indonesia and China this year," said a trading manager at a Singapore-based international trading company.

"How much has been lost in Pakistan due to the floods will also be on everyone's mind," the trader said.