Jakarta, Indonesia, April 14 - The government says it is unlikely to import rice from other Asian nations this year due to bumper local harvests, reducing pressure on tight global supplies during a time of record rice prices.
Prices for Thai rice exports, a market benchmark, have doubled since the start of the year. Rising demand from consumers in China and African nations, hoarding by rice traders, and decisions by Vietnam and India to curb exports have caused prices to soar and panic buying in some countries.
Indonesia -- the world's fourth-most-populous country, with a population of about 230 million -- is entering its rice-harvest season. A poor crop could have meant further strains on supplies as the nation sought to make up for any shortfall by tapping global markets. But a bountiful harvest late last year and signs that the coming crop will also do well mean Indonesia probably won't need to buy rice overseas, said Bayu Krishnamurti, a deputy minister for agriculture at Indonesia's Economic Affairs Ministry.
Indonesia is expected to produce 32.63 million metric tons of rice this year, while domestic consumption is forecast at 31.45 million tons, leaving a surplus of 1.2 million tons. "We are confident to meet domestic rice demand," Mr. Krishnamurti said.
Other Asian nations are also trying to dispel panic over rice stocks that has emerged in recent weeks. Over the weekend, Indian officials cracked down on hoarders. In the Philippines, currently the world's biggest rice importer, government agents this week conducted raids on warehouses around Manila to stamp out hoarding, which officials say has pushed up prices to artificially high levels.
Philippine government officials on Monday also tried to dispel fears that rising rice prices could lead to food riots in the country, which generally imports about 10% of its annual rice supplies. "The security is basically very stable. We don't see any immediate threats to national security, whether caused by this rice crisis or otherwise," said Defense Secretary Gilberto Teodoro.
Rice prices in Indonesia, historically higher than in most of Asia due to stringent import tariffs and government subsidies to farmers, have only increased about 7% in the past six months, much less than in the rest of the region. Prices are now higher in other Asian markets, causing concern in Indonesia that the country's rice traders might prefer to export than sell locally.
To counter this worry, the Trade Ministry plans to issue a decree later this week banning private commodities traders from exporting Indonesian rice, Mr. Krishnamurti said. Only the state logistics agency, which buys around 8% of Indonesia's rice harvest annually to help set prices, will be allowed to export rice. But Indonesia isn't a major rice exporter in any case, so the decision is unlikely to cause many ripples in the international market.
Indonesia was self-sufficient in rice for most of the 1990s. But it has been forced to import from Thailand and Vietnam in recent years as its own production has fallen short of demand. Last year, the country imported 1.3 million tons of rice from other Asian nations. But the 2007-088 harvests benefited from the La Nina weather system over the Pacific Ocean, leading to above-average rainfall in Indonesia and boosting rice yields.
In some regions, farmers have been able to harvest three -- instead of the usual two crops -- in the calendar year. As a result, Indonesia stopped importing rice about six months ago.
Still, in the longer term, Indonesia's rice-supply situation remains precarious, many analysts say. Indonesia's poor, like those in other Asian nations, rely on rice as a staple food and can't afford to pay huge price increases. To help keep market prices in check, most Asian governments have historically built up rice stockpiles, but these are at their lowest levels since the 1970s. Currently, Indonesia has less than two million tons of rice stockpiled, too little to ensure a buffer against future shortages.
What is more, the government hasn't been able to improve yields despite introducing better-quality seeds and fertilizer, said Fahdil Hasan, an agicultural economist at the Institute for Development of Economics and Finance, a local think tank. "Indonesia for the time being is OK," he says. "But this is very fragile. The source of the increase is not coming from productivity but because of the climate."