Indonesia says has ample rice, no risk of unrest

By Sara Webb and Gde Anugrah Arka

JAKARTA (Reuters) - Indonesia can meet domestic demand for rice this year, avoiding the risk of social unrest, thanks to a bumper rice harvest, curbs on rice exports and subsidies for the poor, the trade minister said on Thursday.

Indonesia, the world's fourth-most populous country, is considered one of the Asian nations most at risk of social unrest if food prices, particularly for the staple rice, continue to soar.

Riots broke out in 1998 during Indonesia's financial crisis, leading to the overthrow of former President Suharto, while cuts in subsidies by subsequent governments sparked protests in a country where millions live on less than $2 a day.

But so far, despite growing concerns over rising prices for rice, soybeans and wheat flour in Indonesia, "we haven't had riots, we've had protests," said Trade Minister Mari Pangestu.

"I am worried in the sense that this (global food crisis) is something that obviously we have to anticipate, to pre-empt. If the production of rice is as planned for this year, I think we can feel pretty okay that it's going to be stabilized," she said in an interview.

The government has introduced several policies in a bid to contain surging food prices. It scrapped taxes on cooking oil, as well as the import duties on soybeans and wheat flour, and is curbing rice exports to help build up national stocks.

"The increase in the price of rice is somewhat driven by panic-buying from the Philippines," Pangestu said, adding that Indonesia would be able to meet domestic demand this year as "we feel that it's going to be good harvest", both now and in July.

"If those two are good harvests then we should have enough rice this year."