Board of Logistic [BULOG] Cancels Rice Export

With the permission given to the private sector to export rice, the Board of Logistic BULOG cancelled were permitted to export rice. Such as disclosed by the Director of BULOG public Company Mustafa Abubakar to the pres.

To carry out the export plan, BULOG had held 5 meetings with supplier candidates and prospect buyer overseas. Further this was followed up by requesting recommendation from the Minister of Agriculture. However since the Minister of the Trade adopted a policy that the private sector were permitted to export rice, so the recommendation obtained from the Department of Trade was not submitted to the Minister of Trade as planned.

Up till now the volume of rice exported by the private company only reached 1,500 tons of the target set up by the Government: 100,000 tons. In fact the overseas demand for rice was significantly high. The quality of Indonesia’s premium rice was unmatched in world market. If only Indonesian’s farmers could increase their output of premium rice, then the golden opportunity could be grabbed.

As matter of fact, the overseas markets were also interested in buying organic rice. But Indonesian was not in position into produce pure inorganic rice. The process of making inorganic rice was only to started in Sragen. To produce inorganic rice called for special requirements, among others: the altitude of rice field should be higher than the rice fields not planted with organic rice. This was to prevent watering for the organic rice from being mixed with water containing chemical fertilizers, chemical pesticides etc. In addition to that, organic rice must be certified by the candidates overseas. Presently the farmers capable of producing popular organic rice, using the seeds of Ciherang, IR or Hybrid types, further to be fertilized with organic pesticide but the watering was sometimes still spoiled by inorganic rice filleds areas.

Procurement of Rice
By end of June 2009, realization of domestic rice procurement by BULOG was posted at 2.8 million tons, and target for 2009 was set at 3.8 million tons. Shortage of domestic rice procurement was around 1 million which was to be fulfilled from Gadu harvest. The regional resources of dry rice were among others South Sulawesi, East Java, Central Java, West Java, and West Nusa Tenggara [NTB], East Java, in terms of gadu rice set a target of rice procurement of 260,000 tons against the initial plan of 185,000 tons, whilst West Nusa Tenggara [NTB] increase rice procurement plan from 170,000 tons to become 175,00 tons.

In addition to that, the stock of rice in Bulog’s warehouse up till now reached 2.6 million tons which was sufficient for the rice for the poor program [Raskin] for 9 months ahead. Up to end of June 2009 the realization of Raskin distribution reached 105 million tons or 45% of 2009 target which distributed to 1805 million of poor families [RTM]. The low degree of Raskin realization program was caused by delay of execution, which was not exerdised until April 2009.

Sugar Distribution
Based on the collaboration between Bulog and PT Perkebunan [PTPN] and PT Rajawali Nusantara Indonesia [RNI] as sugar producers, Bulog would act as agency for sugar disyribution at 1.25% fee against sales. In 2008 Bulog handled sales of PTPN and RNI sugar at the amount of 260,000 tons. For 2009 it was agreed that Bulog would market sugar of PTPN and RNI amounting to 681,000 tons of which 38,889 tons had been realized. Auction price of sugar from farmers was lowering from Rp 7,200/kg to become Rp 6,500/kg to become Rp 6,800/kg.

The Government expected that price of sugar at retail level to be at Rp7,000/kg However, Price of sugar at the International market had influenced domestic price of sugar. The price of imported sugar up to importers storage was Rp 8,000/kg to Rp 8,400/kg.

Frying Oil
The Board of Logistic [BULOG] had not been assigned by the Government to handle marketing of frying oil. However, Bulog had submitted to proposed concepts of frying oil management to the Minister of State Owned companies [BUMN]. Firstly, Bulog would pipeline frying oil distribution though the rice for the poor [RASKIN] channel to fulfill need of the poor people. Secondly, BULOG would act as stabilizer of frying oil prices. For that purpose a fund was needed to buy stock of frying oil, besides, to stabilize frying oil price it was inevitable for Builog to hold stocks of frying oil.