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Indonesia to import 1 million tonnes of rice from India, citing El Nino concerns

Jakarta Post - June 19, 2023

Deni Ghifari, Jakarta – The government has agreed to import 1 million tonnes of rice from India in a move that it says is necessary to ensure a sufficient supply of the staple food amid an increased risk of poor harvests this year.

Trade Minister Zulkifli Hasan said the rice would be delivered once Indonesia's reserves neared depletion.

"We have to import rice, however unpopular it is, take the initiative," said Zulkifli on Thursday as quoted by Kompas.com, acknowledging that rice imports were often opposed by local farmers.

The minister said the government was seeking to keep the price of rice stable amid the potential impacts of this year's El Nino climate phenomenon, which could worsen harvests.

The hot, dry weather that El Nino causes is expected to threaten food production throughout Asia.

"If the price [goes up] during El Nino, we must have enough stock [to bring it down again]. That's why I signed a memorandum of understanding with India for 1 million tonnes that we can procure anytime," said Zulkifli.

In late May, Zulkifli opposed the import of garlic despite calls from the National Food Agency (Bapanas) to bring down soaring prices amid low garlic stocks nationwide. He said the country should reduce its reliance on imported goods in favor of local producers.

"We want exports. Let's not get used to importing goods. We should reduce any imports that can hamper our economy," Zulkifli told reporters, as quoted by Tempo.

Prior to the deal with India, the government had, since December 2022, ordered a total of 500,000 tonnes of rice from countries including Vietnam, Thailand and Pakistan.

According to Bapanas, Indonesia is expecting to import around 2 million tonnes of rice this year.

The government's import plan has rattled farmers. Smallholders in East Java and Central Java told The Jakarta Post on March 27 that they opposed plan, saying it would put downward pressure on farmgate prices.

Farmers have faced difficulties over the past months, including elevated fertilizer prices caused, in part, by supply issues stemming from the Ukraine war.

Some experts have urged the government to refrain from importing rice and wait until August to get clearer picture of state production this year.

Rice procurement may be more difficult than usual, as some countries, including Vietnam, are seeking to limit their exports of the commodity.

Vietnam recently announced it would, by 2030, export just 4 million tonnes of rice annually, down from the current 7.1 million tonnes.

The State Logistics Agency (Bulog) said it was not worried about Vietnam's export policy shift, as other producing countries, such as India, Pakistan, Thailand and Myanmar could readily fulfill domestic stocks, Bisnis.com reported.

Source: https://asianews.network/indonesia-to-import-1-million-tonnes-of-rice-from-india-citing-el-nino-concerns