Sprawling queues for subsidized rice highlight plight of Indonesia’s poor

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JAKARTA- In the afternoon sun, dozens of Indonesians, mostly women, gather in a snaking queue to buy bags of subsidized rice, their arms poking through a metal gate to grab tickets assuring them a spot to make a purchase.

The temporary bazaar run by state food procurement agency Bulog in the city of Bekasi, 25 km (15.5 miles) east of the capital Jakarta highlights the struggle of Indonesia’s less fortunate to buy the grain that is at the center of nearly every meal in Southeast Asia’s most populous country.

A staple for most of Indonesia’s 270 million people, the price of rice has climbed more than 16 percent since last year, as the El Nino weather phenomenon has cut rainfall across large parts of Asia in 2023, reducing cereal output and sparking food inflation pressure for some of the world’s most price-sensitive consumers.

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Masih, a 55-year-old coconut vendor, was among those jostling to buy a 5 kg (11 pound) bag of rice.

“It’s better to queue up and have the rice at home. It is expensive in the market, so better to get it cheap here,” she told Reuters.

Rice prices at the bazaar are capped at 10,600 rupiah (67.8 US cents) per kg, compared with 14,300 rupiah in the open market. Bulog limits sales to 10 kg per customer to prevent hoarding.

The government typically steps in to sell food products at subsidized prices when prices climb.

Bulog has distributed more than 300,000 metric tons of rice from government reserves since January through hundreds of bazaars around the country, following reports of scarcity at other retail outlets.

The National Food Agency, which oversees Bulog, said it conducted 429 of the makeshift bazaars in January and plans 315 more by the end of February.

This year in Indonesia, planting delays and lack of rains have delayed the peak harvest by a month, with farm ministry data showing a rice supply deficit of 1.63 million metric tons in January and 1.15 million in February.

Indonesia, which imported record volumes of rice in 2023, has allocated an additional import quota of 1.6 million metric tons, on top of 2 million tons previously approved for 2024, potentially triggering further gains in global prices, which are near 16-year highs.

Indonesian farmer Wardiyono typically starts planting his small rice field in November but this season he began only in January, when rains finally arrived after months of drought caused by an especially strong El Nino weather phenomenon.

Three weeks on, he worries as rains have not been enough for the thirsty crop.

“Normally it rains daily in January. This year, it is different,” Wardiyono, 58, said by phone from Java’s Klaten regency south of the city of Surakarta. Wardiyono, who has one name like many Indonesians, said some days it was completely dry and for several days is has been just short spells of rain.

The planting delays and lack of rain Wardiyono is experiencing point to the likelihood of a worse-than-expected rice harvest and higher imports in 2024 in the world’s fourth-largest consumer of the staple. The Indonesian government is expecting the usual March-April peak harvest to be delayed by a month because of the below normal precipitation in Java, the country’s key rice growing region.

Lower Indonesian rice output may tighten supplies at a time prices are already near their highest since 2008 amid lower output in top exporters Thailand, Vietnam and India.

The London-based International Grains Council forecasts another decline in Indonesian rice output this year after El Nino curtailed the 2023 harvest, IGC analyst Peter Clubb said.

“El Nino has had quite a sizeable impact on Indonesia, leading to much reduced rainfall.

This will likely see Indonesia’s imports remain above average in 2024,” he said.

Indonesia’s initial forecast for 32 million metric tons of rice output in 2024 has been undercut by predictions that rice output in January and February is expected to drop 46 percent from a year ago to 2.25 million tons.

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Typically, planting for Indonesia’s main rice crop begins with the start of the wet season in October, with harvesting in February-April. The country produces two rice crops, with the harvest during the October-April wet season accounting for 55 percent of annual output.

Signs of the expected 2024 decline are apparent with the farm ministry reporting the area planted with rice in the fourth quarter of 2023 dropped to 2.91 million hectares (7.2 million acres), below the target of 3.53 million hectares (8.7 million acres).

About 35 percent of Indonesia’s 7.46 million hectares (18.43 million acres) of rice-growing areas depend on rain for irrigation, said Zulharman Djusman, the head of the farmers and fishermen association KTNA.

Lower output would mean higher imports and Indonesia has already approved 2 million tons in 2024, a quarter of which is expected to arrive by March, officials said. In 2023, it imported 3.06 million tons of rice, a near-record.

That should translate into higher costs for Indonesian consumers as rice prices in Thailand , the world’s second-largest exporter, and Vietnam , the third-largest, have been rising since late 2023 after a brief respite amid dryness in key supplying countries.

Indonesian rice has already been gaining, averaging 14,763 rupiah ($0.9356) per kg in January, about 15.6 percent higher than a year ago.

A government handout scheme launched last year providing 10 kg of rice monthly to 22 million lower-income households, has helped eased some of the pressure, although lower-middle class households are not covered.

In the West Java regency of Indramayu, many farmers who planted seedlings in November are still waiting for rain and scrambling to borrow money for replanting, said Ayip Said Abdullah of the People’s Coalition for Food Sovereignty, a farmers advocacy group.

“They have spent money to sow rice seedlings, which didn’t grow,” Ayip said. -Reuters

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