A little-known fact about rice is that the majority of it stays within the country in which it is produced. In fact, according to the World Bank, only five percent of global rice production is traded internationally. Therefore, rice prices can be easily influenced by slight changes in local supply and demand.
Also, the international rice supply originates and is dominated by three countries only viz. China, India, and then Indonesia. So, any sudden changes in the trade policies of these countries directly lead to a sudden change in price globally.
Now, Indonesia is the third largest rice producer in the world. However, owing to its high per capita consumption of rice and non-optimal production techniques, it’s way too behind in the export race. It is now planning to reach self-sufficiency and more than that become a major rice exporter.
Agriculture Minister of Indonesia, Syahrul Yasin Limpo has encouraged the provincial government of Southeast Sulawesi to Export Rice in India. Mr. Limpo claims that the rice stock of Indonesia is at 10.2 million tons as of now and can meet domestic needs for the next two years. However, before the rice is exported, he emphasized the need to process rice to improve its quality and price.
The minister said that the price of rice in Indonesia which stands at Rp 12,000/kg is the second cheapest in the world. Meanwhile, the price of rice in Japan has reached Rp 47,000, the United States Rp 62,000, Singapore Rp 29,000, and Malaysia Rp 22,000/kg.
Mr. Limpo believes that Southeast Sulawesi can become a national food barn. Currently, the domestic markets of Indonesia are dominated by the rice produce from South Sumatra and West, East, and Central Java. He believes that not only Southeast Sulawesi can meet the local demands but also has the potential for filling up the export needs.
The deal for the export of 2.5 million tons of rice is already in motion. Mr. Limpo and the Chinese representatives have reportedly discussed on annual export of rice reaching 2.5 million tons. However, it is to be noted that nothing has been finalized and is subject to further discussion during the internal meeting with the President.
Indonesia’s Brawl For Self-Sufficiency:
The Indonesian government has put forward two approaches on either end. On one end, it encourages farmers to improve their agricultural infrastructure. On the other end, the government is trying to bring per capita consumption to a lower level by releasing campaigns such as ‘’one day without rice per week’’. It also encourages the use of other staple food except for rice.
The growth in Indonesia’s rice industry is nothing short of astounding. Just a few years ago, the country was importing around 2 tons of rice annually. But now, it’s exploring plans to export 200,000 tons of rice to China and other countries in the coming months. This dramatic increase is due in part to the country’s favorable climate and soil conditions for growing rice. But it is also the result of to the hard work and dedication of Indonesian farmers who have worked tirelessly to meet rising demand.