Indonesia doubles volume of rice released to market to blunt price spike

JAKARTA, May 18 (Reuters) - Indonesian food procurement agency Bulog has doubled the amount of rice released from stocks this year in a bid to stabilise prices that have spiked as other agencies snapped up supplies to be distributed to people affected by the coronavirus outbreak.

Bulog director Tri Wahyudi Saleh said on Monday that the trend was so pronounced that prices have remained high even though Indonesia is currently in the middle of its rice harvest, a season when supply is abundant and prices should drop.

As of May 17, Bulog had distributed 596,305 tonnes of rice in its market intervention, Saleh said, speaking during a seminar streamed online. In comparison, in January-May last year, Bulog distributed 225,685 tonnes rice for market intervention, according to agency data.

Saleh said rice prices remain elevated, despite the harvest period that started around April, because of high demand for social assistance programmes amid the coronavirus outbreak and restrictions that have been imposed to counter it. The virus has infected more than 17,500 people in Indonesia, killing more than 1,100.

“This is harvest season where supply is abundant and prices should drop, but in this harvest season, demand is so high it keeps prices above the maximum retail price limit,” Saleh said.

“We were earmarked to distribute 2,000 tonnes of rice per day during harvest season, but in reality we can sell up to 4,000 to 5,000 tonnes a day,” he added.

Government data showed that on Monday the average retail price of rice was 12,050 rupiah ($0.81) per kilogramme, up from 11,800 rupiah at the start of the year. Average rice prices were at 11,700 in mid-May last year.

The government has an indicated maximum retail price for medium-grade rice that ranges between 9,450 and 10,250 rupiah per kilogramme depending on the region.

Meanwhile, Bulog has procured 326,678 tonnes rice equivalent from domestic production this year, out of its 1 million tonnes procurement target for 2020, Saleh said.

Bulog also currently has 1.33 million tonnes of rice for government stock, and 107,079 tonnes of rice for its commercial stock. ($1 = 14,885 rupiah) (Reporting by Bernadette Christina Munthe; Additional reporting and writing by Fransiska Nangoy; Editing by Kenneth Maxwell)