drought in indoneisa riceAs per sources, the  Indonesian domestic rice prices are increasing due to lower production and on  extending drought conditions induced by the El Niño weather phenomenon .It has been noted that rice prices have increased during the last few weeks in all the rice producing regions, including West Java, East Java, Central Java, North Sulawesi and Gorontalo.

Further, it has been revealed that the Meteorology, Climatology and Geophysics Agency (BMKG) predicts that the El Niño weather phenomenon will extend Indonesia’s dry season, and this  normally takes place between April and September, until November which may  likely to affect 18 of the country’s 34 provinces.

In this context, the state Logistics Agency Bulog’s Procurement Director informed that the agency’s rice stocks are also affected by the drought. It has been noted that farmers are reluctant to sell their output to the agency and prefer to store the stocks. Bulog’s prices are lower than the market prices which are not attractive to them. However, it has been noted that Bulog currently has 1.7 million tons of rice, which would be sufficient to meet the country’s consumption demand until the end of this year.

Further, the sources informed that, the Indonesia government is keen on achieving self-sufficiency in rice production this year and avoids imports. It has been reiterated that the country’s rice production is safe despite the on-going dry weather conditions due to the El Nino weather pattern .The Ministry is expecting 7% y/y increase in paddy rice production to around 75.2 million tons in 2015 from around 70 million tons in 2014.According to the Food and Agriculture Organization (FAO), Indonesia’s domestic rice prices have been increasing since April this year. In August, average rice prices stood at around 10.14 million Rupiah per ton (around $740), which is about 12% more from their year-ago levels of around 9.06 million Rupiah per ton (around $770) during the same time last year.

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