July 25, 2013 / 9:12 AM / in 4 years

Indonesia's Bulog builds rice stocks to nearly 3 mln tonnes -CEO

* Stock-build could mean no Indonesia rice imports in 2013

* Indonesia import doubts come as Thailand selling down stocks

* Indonesia unmilled rice output forecast flat to 5 pct higher

By Yayat Supriatna

JAKARTA, July 25 (Reuters) - Indonesia’s state food procurement body Bulog has built up rice stocks of nearly three million tonnes, the CEO said on Thursday, reducing the likelihood that Southeast Asia’s largest economy will import the staple grain this year.

The large stocks and possible lack of Indonesian imports will not be welcome news in Thailand, where the government is targeting to sell up to 1.5 million tonnes of rice each month for the rest of the year. Thailand needs to cut losses from a price-support scheme and free up storage for a coming harvest.

Earlier this month, Bulog, which usually maintains rice stocks at between 1.5 million to 2 million tonnes by buying from domestic and regional suppliers, said it could import up to 600,000 tonnes of rice this year. But it also said it was hoping to not have to import rice in 2013.

“Our current rice stock at Bulog warehouses is 2.82 million tonnes,” Bulog CEO Sutarto Alimoeso told reporters.

It isn’t clear if Indonesia will need rice imports this year as it depended on domestic output, he said, adding that if production rises by 5 percent as it did in the previous year, then there would be no need to ship in extra supplies.

Indonesia’s statistics bureau has forecast that unmilled rice production will be little changed at 69.27 million tonnes, while the agriculture ministry sees output rising 5 percent to 72.1 million tonnes.

Indonesia imported 1.38 million tonnes of rice last year, and usually buys from Vietnam, India and Thailand.

Earlier this year, an agriculture ministry official urged Bulog to scrap rice imports this year, as the annual surplus will likely jump 22 percent to 8.3 million tonnes.

Thailand has built rice inventories of up to 18 million tonnes due to an intervention programme in which it pays above market prices to farmers. The programme was first introduced as a political scheme during an election in 2011.

Thailand is now stepping up efforts to sell rice from its stockpiles in order to get fresh funds for the costly support scheme and to make way for grain from coming crops.

Indonesia was self-sufficient in rice in the early 1980s, but output gradually declined as farmland was used for housing for a booming population. The agriculture ministry has drafted a 2013-2015 regulation to stop agricultural land, mainly aimed at rice paddies, being converted to industrial or housing use.

Bulog, which can also import beef, corn, sugar and soybeans, is tasked with keeping food affordable by buying and selling staples locally at set rates.

Bulog also runs a rice-for-the-poor scheme. (Writing by Michael Taylor; Editing by Tom Hogue)

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