INDONESIA May 2020
Staple foods like rice and wheat represent an important commodity to every corners of the globe. Due to its importance, prices of such commodities have surged as supply chains are under strain from the coronavirus pandemic that is limiting labor availability and prompting producing countries to stockpile food grains.
The situation is worsening with every quarter, and if the pandemic does not recede by year end, we might face a possibility of supply shortage in many countries which could lead to consumer panic on a global scale.
In Indonesia, a country with more than 260 million population, the State Logistics Agency (Bulog), the government institution tasked with securing national staple food stocks, is facing trouble importing rice, sugar and buffalo meat, as producing countries have restricted exports in response to the COVID-19 pandemic.
To overcome this, Bulog is planning to procure as much rice as possible from local farmers to ensure steady supplies during the outbreak. In the past, Bulog has been importing hundreds of thousand tonnes of rice from Vietnam, but recently the country had capped its exports overseas to 800,000 tonnes for the April to May period to ensure it has sufficient domestic supplies. India has also done the same.
Bulog agency Head, Budi Buwas Waseso said the country needs to have ample stocks, and there is a need now to maximise domestic procurement. Budi said Indonesia’s current rice stocks are estimated to exceed consumption until the end of May by 8.3 million tonnes. Bulog is planning to procure 950,000 tonnes of rice from local farmers for this year’s stocks.
Bulog is also anticipating a surge in demand for other staple ingredients such as sugar. However, logistic disruption is hampering the agency’s efforts to ensure enough supplies. Indonesia is currently facing a shortage in sugar supply which leads to its price rising by 20% to US$0.96 per kg from February to March this year. To ensure adequate supplies, the Trade Ministry has given Bulog the green light to import 50,000 tonnes of sugar. Unfortunately, producing countries such as Australia, India and Thailand were in lockdown while container ships are not operating as usual.
In January, Bulog also requested a permit from the ministry to import buffalo meat from India, but by the time the ministry granted the permit, India, a top exporter of buffalo meat, had put the country in a state of lockdown. As of present, Bulog has only 113 tonnes of buffalo meat.
In the future, the Indonesian government needs to expedite and facilitate Bulog in obtaining permits for essential commodities. In addition, the country also needs to relook at building its own domestic production.
The situation is worsening with every quarter, and if the pandemic does not recede by year end, we might face a possibility of supply shortage in many countries which could lead to consumer panic on a global scale.
In Indonesia, a country with more than 260 million population, the State Logistics Agency (Bulog), the government institution tasked with securing national staple food stocks, is facing trouble importing rice, sugar and buffalo meat, as producing countries have restricted exports in response to the COVID-19 pandemic.
To overcome this, Bulog is planning to procure as much rice as possible from local farmers to ensure steady supplies during the outbreak. In the past, Bulog has been importing hundreds of thousand tonnes of rice from Vietnam, but recently the country had capped its exports overseas to 800,000 tonnes for the April to May period to ensure it has sufficient domestic supplies. India has also done the same.
Bulog agency Head, Budi Buwas Waseso said the country needs to have ample stocks, and there is a need now to maximise domestic procurement. Budi said Indonesia’s current rice stocks are estimated to exceed consumption until the end of May by 8.3 million tonnes. Bulog is planning to procure 950,000 tonnes of rice from local farmers for this year’s stocks.
Bulog is also anticipating a surge in demand for other staple ingredients such as sugar. However, logistic disruption is hampering the agency’s efforts to ensure enough supplies. Indonesia is currently facing a shortage in sugar supply which leads to its price rising by 20% to US$0.96 per kg from February to March this year. To ensure adequate supplies, the Trade Ministry has given Bulog the green light to import 50,000 tonnes of sugar. Unfortunately, producing countries such as Australia, India and Thailand were in lockdown while container ships are not operating as usual.
In January, Bulog also requested a permit from the ministry to import buffalo meat from India, but by the time the ministry granted the permit, India, a top exporter of buffalo meat, had put the country in a state of lockdown. As of present, Bulog has only 113 tonnes of buffalo meat.
In the future, the Indonesian government needs to expedite and facilitate Bulog in obtaining permits for essential commodities. In addition, the country also needs to relook at building its own domestic production.
