Rice stock in check despite lower production, higher demand

The Trade Ministry has said that the rice stock from the upcoming harvest season will last through November despite declining production and surging demand.

The ministry’s domestic trade director general, Suhanto, estimated rice production to decline by 10 percent to around 17.8 million tons, citing a report by the Indonesian Rice Millers and Entrepreneurs Association (Perpadi). Added with the current stock of 3.3 million tons, the supply would exceed national demand by 6.2 million tons, the ministry estimated.

Perpadi also recorded a threefold rise in demand recently with government agencies and private organizations buying more rice for social assistance aimed at helping those most vulnerable to the impacts of the COVID-19 outbreak.

“It means that milled rice in general has been distributed to the public either via retail markets or social assistance,” Suhanto said Tuesday in an online hearing with the House of Representatives Commission VI overseeing trade and industry.

Rice farmers and food businesses are facing logistical disruptions on top of price volatility due to the large-scale social restrictions that were implemented to contain the fast-spreading coronavirus, which has infected more than 7,700 people nationwide.

The average price of rice slightly rose by around 0.8 percent to Rp 11,950 (77 US cents) per kilogram on Wednesday from a month earlier, according to data from the government’s staple food prices tracker, the Information Center for Strategic Food Prices (PIHPS).

President Joko “Jokowi” Widodo said Tuesday that rice prices should have fallen instead, in line with the downward trend in unhusked rice prices. The average price of unhusked rice declined 4.6 percent to Rp 4,936 per kg between March and January, according to Statistics Indonesia (BPS) data in February.

With Ramadan having started Friday, the demand for rice is expected to rise even more. According to data from the Agriculture Ministry’s Food Security Agency (BKP), rice demand rose 3 percent in the days leading up to Ramadan and is expected to jump 20 percent ahead of Idul Fitri in late May.

“To ensure there is a sufficient rice stock and stable prices, the Trade Ministry has ordered the State Logistics Agency (Bulog) to distribute medium quality rice to the markets,” Suhanto said.