Jakarta, April 15 - Indonesia is banning rice exports until such time as its surplus national stocks reach 3 million tons to ensure sufficient domestic supplies, Trade Minister Mari Pangestu said Tuesday.
The move - a preemptive measure given that Indonesia has traditionally been a net rice importer - takes immediate effect. The decree comes at a time when worried regional governments are looking to shore up their domestic supplies as global rice prices soar.
It wasn't immediately clear what the current surplus national stock level is. The surplus at the end of this year is, however, projected at 1.2 million tons.
Pangestu said that only Bulog, a national commodities trading agency, will be able to export rice. Until Tuesday's statement, there was no decree barring private commodity traders from exporting rice.
Pangestu also said that domestic prices of rice have to be below a certain threshold before the government would approve exporting the commodity. That price will be set later, she said.
The minister said that current stocks are "sufficient" and that the country doesn't need to import any rice. The government will, however, continue to monitor the situation, especially with Indonesia's rice harvest coming to an end in May.
Analysts are skeptical about Indonesia's ability to become self-sufficient in rice as it lacks good-quality seeds resulting in yields that are lower than the global average. The country is also beset by a shortage of land and fertilizers.
Food accounts for a large percentage of the average Indonesian's total expenditure, with some estimates putting it above 40%. The government has vowed to keep a lid on rising food prices to avoid mass public demonstrations.
When prices of soybeans - used to make a staple called tempeh - more than doubled in price earlier this year, tens of thousands took to the streets to protest the rise.
Rice contracts for the months of May and July hit all-time highs in electronic trading at the Chicago Board of Trade Tuesday.
CBOT May rice is trading at an all-time high of $21.88/hundredweight, up 62% from a year ago.