20000223Indonesia grain: Rice abundant, corn imports soon

JAKARTA: Foreign rice is still arriving in Indonesia, threatening to further reduce prices while corn imports are expected to resume in April after the end of the crop harvest, traders said on Tuesday.

Indonesia was contracted to import up to three million tonnes of rice in 1999, but some of the grain bought by the government and private traders has yet to reach the country.

"I strongly reject the idea that private traders are still buying rice after the government imposed a 30 percent tax in January. That's wrong," said one trader in Surabaya, East Java.

"The reason why rice prices are depressed is because rice bought through old contracts is still arriving. I also found out that consumer demand is slow," he added.

Traders said the price of locally-grown rice had fallen to 2,300 rupiah/kg compared with 2,500 rupiah/kg a few months ago because imported rice was much cheaper at 1,800 rupiah per kg.

The Indonesian Farmers Association has complained that illegal rice imports had continued unabated and threaten the livelihood of 22 million farmer families in the world's fourth most populous country.

CONSUMERS HAVE PLENTY OF CHOICES, RICE ABUNDANT

"I agree that consumption is slow, but that's because consumers have plenty of choices. Rice is abundant and prices vary, so I don't see any reasons why they must hurry to buy it," said another trader in Surabaya.

The government said Indonesia's rice imports were expected to fall to 1.5 million tonnes in 2000 because of the import tax and better domestic harvests.

Unhusked rice production was projected to rise 2.26 percent to 51.0 million tonnes this year because of the expansion of plantation and better yields, according to the government.

Traders said soybeans imports were expected to rise this year because the currency crisis had forced many Indonesians to shift from meat to other sources, such as the popular tempe or tofu snacks. Imports were seen at 1.02 million tonnes in 1999.

"Imports will be more than one million tonnes this year because people who used to eat chickens have now shifted to tempe," said the first Surabaya trader.

"Soybean imports are continuing. Most of beans come from the United States at around $215/tonne on a cost-and-freight basis. Corn imports shall resume in April after the crop. I think imports will reach 500,000 tonnes this year," he added.

One trader in Bandar Lampung, the provincial capital of Lampung, said feedmillers had started to stock up during the corn harvests in Lampung and East Java.

"Big feedmillers are piling up their stocks. One can buy hundreds of tonnes of corn a day for their own use. There could be fresh imports after the crop, but I am not so sure about it," he said.

"There is plenty of rains these days, which make it possible for farmers to plant new crop," he added.

Traders said Indonesia was likely to import Chinese corn at around $110/tonne on a cost-and-freight basis.-Reuters