Rice price crisis in Indonesia

17 June 1998

Rice price crisis in Indonesia

BULOG, the Indonesian government logistics agency, says it cannot find sufficient rice stocks to continue its buying operations aimed at stabilising prices – despite raising the floor price for unhusked rice from Rp700/kg to Rp1,000 last month.

Indonesian agricultural experts say this years rice harvest will be 4-6% lower than the last normal harvest of 1996, reaching about 46-47 million tonnes.

Farmers are reluctant to sell, keeping supplies to feed their own families and to plant. There is also a believe in most villages that prices will rise further.

Rice farmers in Pulau Kelapa say they need higher prices to buy fertilisers and pesticides, many of which contain imported ingredients that have more than doubled in price since the rupiah collapsed.

• Financial Times 17/06/98 page 38