Logistics is Crucial Issue for Rice Imports

Scheduling rice imports is considered a very crucial issue because it involves arranging transportation. However, Bulog is still waiting for the realization of the rice procurement promised by the Agriculture Ministry.

KOMPAS/TOTOK WIJAYANTO (TOK)

Workers carry rice at the Cipinang Rice Main Market, Jakarta, Wednesday (23/11/2022). Based on data from the National Food Agency, rice stocks at Perum Bulog as of 22 November 2022 amounted to 594,856 tons.

JAKARTA, KOMPAS — The government's plan to import rice to boost the food reserves managed by state logistics firm Perum Bulog is still waiting for the Agriculture Ministry to realize domestic procurement. In fact, the longer Bulog takes to realize its import contracts with exporters, the greater the logistical challenges will be.

Member of the Advisory Board of the Indonesian Agricultural Economic Association (Perhepi), Bayu Krisnamurthi, said the technical procedures for importing rice should be fulfilled, such as the volume and time table.

"Scheduling [imports] is the most crucial because it involves [arranging] transportation, such as finding ships, loading and unloading times, their journeys to ports. Scheduling is the key in realizing rice imports to Indonesia," he said when contacted on Thursday (24/11/2022).

According to Bayu, importing 500,000 tonnes of rice requires a logistics ship with a capacity of 5,000-10,000 tonnes. Thus, the shipments need to be scheduled based on the capacity of the ships.

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Perum Bulog president director Budi Waseso expressed concern that national holidays in partner countries would have an impact on transportation and logistics operations. Importing rice was challenging in view of forecasts of bad weather that could cause high waves.

In fact, according to him, Bulog was assigned to import 500,000 tonnes of rice during a recent limited coordination meeting of related ministries and institutions. The import plan arose because the government's rice stocks had begun to decline, while domestic procurement had declined because the harvest season had ended.

As of Thursday (24/11), Bulog’s rice stock totaled 583,000 tonnes. The realized rice procurement from within the country totaled 918,000 tonnes, while distribution for market operations reached 985,000 tonnes. These figures are the lowest compared to Bulog’s stocks in the last 9 years.

KOMPAS/HERU SRI KUMORO

Farmers plant rice in the paddy fields of Kota Baru, Karawang, West Java, Wednesday (23/11/2022). The Ministry of Agriculture claims that national rice stocks will be safe until the end of 2022.

Domestic rice

On the other hand, during a meeting with a House of Representatives (DPR) commission on Wednesday, the Agriculture Ministry promised to procure 600,000 tonnes of rice domestically within six days. If the procurement cannot be realized, the ministry’s data showing a surplus of 6 million tonnes can be considered invalid.

According to Bulog chief Budi, the realization of the import plan is waiting for the ministry to realize its rice procurement from the domestic market. If this was realized, the rice allocated by partner countries would be released into the international market. Conversely, if it was not fulfilled, Bulog would immediately realize the import plan.

National Food Agency (NFA) head Arief Prasetyo Adi said he was concerned that Bulog's rice stock would not reach the ideal amount of 1.2 million tonnes, leaving the government powerless to suppress the potential increase in rice prices. With the current stock, Bulog is expected to have only around 342,000 tonnes of rice by the end of the year. The government does not want to take risks in managing the rice stocks.

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In the same meeting, the Agriculture Ministry’s Director General of Food Crops at, Suwandi, claimed that 351,370 tonnes of rice could be prepared by rice millers in eight provinces for procurement by Bulog. However, agreeing on the rice specifications and prices was a contractual challenge.

Regarding the conclusion of the meeting, Bayu said it would be difficult for the rice millers to release their stocks. In the midst of limited supply in the market, the millers would maintain theirs stocks to anticipate supply shortages.

According to chairman Sutarto Alimoeso of the Association of Rice Millers and Traders, current production was below the required monthly level.

"However, Bulog's current stock is sufficient for market operations until early January 2023, so there is no need to import," he said. (JUD)

This article was translated by Hendarsyah Tarmizi