LOGISTIC’S TARGET OF RICE PROCUREMENT REVISED TO BECOME 2.4 MILLION TONS

The Board of Logistics (BULOG public company) revised target for rice procurement and purchases from the former 3.2 million tons to become 2.4 million tons. The objective was to keep BULOG from storing rice too much and too long which may result in poor quality of rice. This was disclosed by the Director of General Services of Bulog Sutono to the press.

The stock of rice managed by BULOG as per July 19, 2010 was 1.74 tons or sufficient for over a period of 6.65 months (until early 2010) for routine pipelining and even distribution in all of Indonesian provinces; the entire stock originated from domestic procurement. With continued procurement at home in some regions, it is expected that stock would continue to pile up.

In the effort to stabilize price of rice, especially toward the fasting month of Ramadhan, Perum BULOG is in charge of launching market operations in areas where prices are climbing up like in Java, Papua, East Nusa Tenggara, and MAluku. Market operations may also be run in regions where increasing price of rice is apparent.

Market operations in Greater Jakarta had been run early this week. Market operations are run in 12 traditional markets and at the Cipinang Central Market. As with other areas, coordination has been made with the Provincial Governments and regencies/cities in running these market operations.

The strategy and market operation of Market operation are a follows :

a. Market operation is run without waiting for the price to increase by 10%. In case of any signal that price is crawling up, BULOG would immediately run a Rice Market Operation.

b. Market Operation is run to the heart of consumer centers or through retail traders at traditional market. It is not run through wholesalers of big traders, in order to cut distribution chain.

c. Formation of rice – price today is too high. The price of rice at wholesalers level of Cipinang Central Market for IR-64-III through January – July 2010 was Rp 5,293/kg on the average, meanwhile at the retail level was Rp 6,370/kg on the average. This means that there was price difference between wholesaler and retail of Rp 1,077/kg or retail price of 20,33% above wholesalers price.

d. By running market operation directly to retailers and consumers, the price difference could be down pressed to around Rp 400/kg to Rp 500/kg. The selling price of rice at the Market Operation will gradually be lowered until prices return to normal.

In addition to Market Operations, Perum BULOG has, and will, take several steps to stabilize prices of rice through:

a. Accelerating distributions of “Rice for the Poor” (RASKIN) toward and through the fasting month of Ramadhan to fulfill 2 month need.

b. To realize addition of Raskin allocation from 13 kg/family/month to become 25 kg/family/month or an increase or 244,723 tons of rice to be pipelined through July – December 2010, from 2,728.129 to become 2,972,961 tons. Hence rice stock of the poor people can be fulfilled without interrupting market demand.