Indonesia, Asean Move to Ease Rice Supply Fears

Indonesia will need no more rice imports for six months, and big buyer the Philippines may need just a third as much as what it required last year from global markets, helping to keep supplies of Asia's main staple ample.
Plentiful supply has capped rice prices even as some Asian buyers boosted purchases amid concern about food security as other grain prices raced to multi-year highs.
High prices have stoked global inflation, putting the rising cost of food high on policymakers' agendas.
"Our rice stock now is enough to cover our needs for the next six months," said Sutarto Alimoeso, head of Indonesia's state procurement agency Bulog.
"Besides, we are now entering the domestic harvest season and Bulog has been starting to buy locally," he said. Bulog had bought 86,000 tonnes of rice from the domestic market last month, he added.
Sutarto said earlier last month that Bulog aimed to raise rice stocks to 2 million tonnes from 1.5 million tonnes by the end of the year via domestic procurement, because of expected higher production.
Indonesia surprised markets in January by buying 820,000 tonnes, or nearly five times as much rice as expected, lifting regional prices, and then suspending rice import duties in a move that signalled it could be looking to stockpile more.
This added to concern that tightening fundamentals in the rice market might drive prices higher.
Further reflecting this worry, South-east Asian countries, China, Japan and South Korea plan to build a rice reserve to guard against volatile commodity prices.
The countries agreed at a two-day meeting in Laos over the weekend to establish rice reserves of around 787,000 tonnes, to help stabilize costs after global food prices surged to a record in January, said Gusmard Bustami, a senior official at Indonesia's Trade Ministry.
"We are very concerned with food security. We know we must handle price increases that have led to the rise in food prices together with other countries," he said via telephone from Vientiane yesterday, after a meeting of the economic ministers of Asean and the three North-east Asian countries.
Traders said the targeted stockpile is too small to have an impact on the market.
It was reported that the group aims to sign the rice agreement in October, with China to provide 300,000 tonnes; Japan, 250,000 tonnes; and South Korea, 150,000 tonnes.
Trade Minister Mari Pangestu, chair of the meeting, said Asean countries should not repeat their 2008 moves, when worries over a food crisis led to panic buying and Vietnam suddenly limiting its rice exports, Indonesian newspapers reported.
In the Philippines, Agriculture Secretary Proceso Alcala said the government may import around 800,000 tonnes of rice this year. The planned purchases would be just a third of the country's record  2.45 million tonnes bought last year.
Better rains and a possible good harvest give it reason to renew a goal of rice self-sufficiency by 2013.
Prior to its import cuts this year, the country was the world's biggest rice buyer.
Reuters

(Source: http://www.thejakartaglobe.com/business/indonesia-asean-move-to-ease-rice-supply-fears/425878)