ANN/THE JAKARTA POST – The Association of Indonesian Retailers (Aprindo) reported a scarcity of premium-quality rice across Indonesia amid a spike in demand and a delayed harvest season.
The National Food Agency (Bapanas), meanwhile, said overall rice stocks are adequate as the government imported some 500,000 tonnes of rice this year.
Nevertheless, it pledged to accelerate the distribution of rice to traditional and modern markets in compliance with President Joko “Jokowi” Widodo’s order to “flood the market”.
The term “modern markets” is used in Indonesia to refer to supermarkets and mini markets, which typically sell premium-quality rice, as opposed to wet markets that also sell the cheaper, medium-quality rice.
Researcher at the Center of Reform on Economics (CORE) Eliza Mardian explained that Indonesia was facing a surge in orders for rice at the beginning of this year, as the country approached the fasting month of Ramadhan.
The general election contributed to the increase in demand, as presidential and legislative candidates typically distribute free rice to their supporters. At the same time, there is a shortage of rice supply because the El Niño weather phenomenon is delaying the harvest season, which, according to Eliza, is expected to occur only in March this year.
Nevertheless, the researcher agreed with Bapanas that the rice reserves should be sufficient to meet demand until the harvest season.
“The problem lies with the stock management and distribution. We should be aware that 90 per cent of rice distribution is controlled by private entities. Thus, there is no (comprehensive) data on rice stocks and distribution, making it hard to track,” Eliza told The Jakarta Post on Monday.
According to Aprindo, two types of rice are sold in retail markets: rice sold commercially by private companies or the State Logistics Agency (Bulog) and rice sold by Bulog under the price stabilisation (SPHP) programme to balance the market. The scarcity in modern retailers, according to the association, was caused because the wholesale price of commercial rice had exceeded the government-set price ceiling (HET).
“If the buying price of commercial rice is IDR17,000, while the HET is only IDR15,500, we would incur losses, right? That’s why retailers decided not to purchase the rice (and keep the shelves empty),” Aprindo Chairman Roy Mandey said.
The situation was exacerbated when Bulog, which used to also distribute SPHP rice through modern retailers, shifted those stocks toward social aid programmes, according to Roy. He warned the government that a scarcity of rice at modern retailers could encourage panic-buying.
“If we want a certain (amount) of SPHP rice, they only provide less. We want a guarantee that if we request a certain (supply), please provide it. Do not withhold it,” Roy stated.
Aprindo suggested raising the HET but Roy said the government might be reluctant to do so, as that could stoke inflation.
Bapanas head Arief Prasetyo Adi opined that it may not be wise to change the HET while the market was “unbalanced” with a significant amount of imported rice and that that discussion might be best re-opened only after the main harvest season.
