Global Rice News

Rice Supplies Vanish from Franchise Outlets in Indonesia

Urban shoppers in Indonesia have been taken aback by the sudden disappearance of rice supplies from popular franchise shops such as Alfamart and Indomart. Several rice brands that are typically available in 5 kg packets, such as Sania, Kunci Gada, and Platinum, are nowhere to be found. Retail management officers have confirmed that rice stocks have been empty since the quiet week leading up to the 2024 presidential election.

Budi Santoso, a representative from Alfamart in the Jabotabek area, revealed that the scarcity in their outlets resulted from reduced supply from suppliers. This shortage has been ongoing for the past week. Premium varieties of rice have been particularly affected.

“We do have rice, but the quantity is limited, resulting in uneven distribution. Alfamart is currently distributing the available amount of goods, so purchases are limited,” Santoso explained.

The scarcity of rice in modern retail stores began during the lull before the election. Rani Wijaya, GM of Corporate Communication at Alfamart, stated in a press release that the stock of local premium rice in 5 kg packaging could not meet the demand at their outlets. This scarcity was also reflected in the rice stock in their warehouses.

Observations have shown that rice shortages in franchise stalls, including both Alfamart and Indomart, have occurred in several areas in Jabodetabek, such as Depok, Jagakarsa, Bojong Gede, Sentul, Kelapa Gading, Cibubur, Cipondoh, and Pinang. Retail shops in Jagakarsa, in particular, have been observed with empty shelves where rice used to be.

Traders on Jalan Raya Srengseng Sawah have reported that rice scarcity began two months before the election. Alongside the scarcity, prices have started to rise. For example, the price of MBW bulk rice, which used to be sold for Rp. 12,000 per kilogram, is now being sold for Rp. 15,000 per kilogram. There has been an increase of around Rp. 3,000 per kilogram. However, despite the price increase, rice sales have not seen any benefits. This is because the high purchase cost from distributors forces sellers to combine rice with other products like basic necessities in order to make a profit.

In Lenteng Agung Street, South Jakarta, a rice seller named Farhan also confirmed the scarcity of rice. He has been experiencing this shortage for about a month, as has the Cipinang Main Market in East Jakarta. Farhan, who hails from West Sumatra, usually sells Jeruk’s stamped rice for Rp. 120-130 thousand per 10 kg, but now has to sell it for Rp. 150 thousand per 10 kg.

Reasons for the Scarcity

Dwi Andreas Santoso, an agriculture professor at IPB, explained that the scarcity of premium rice, especially in modern retail stores like Alfamart and Indomart, is due to low rice stocks in their warehouses. This shortage is a result of limited supply from large mills that produce premium rice for these retail outlets.

Andreas clarified that the scarcity of premium rice has been an issue since August, when the price of harvested dry grain increased to Rp. 6,272 per kilogram at the farmer level. The high price led many large mills to halt production, especially since the selling price of rice is limited by the Highest Retail Price (HET) of Rp. 13,900 for Zone 1. With the high cost of unhulled rice and limited prices, many entrepreneurs chose to stop producing premium rice.

“The supply of premium rice to modern retailers has therefore decreased. They are only releasing existing stocks, resulting in limited ability to sell premium rice in these outlets,” Andreas explained.

The price of rice started to stabilize around October, ranging from Rp. 14,500 per kilogram to Rp. 14,600 per kilogram in December. However, the price has suddenly increased and is now at Rp. 15,000 per kilogram. Andreas noted that the price of dry unhulled rice at the farmer level fell to Rp. 7,800 in September-October, but soared again in January 2024, reaching its highest point yet. This price surge was partly caused by miscommunication from the government, which stated that there would be a rice deficit of 2.8 million tons in January.

In reality, the government decided to import 3.3 million tons of rice from countries like Thailand, Vietnam, Pakistan, and Myanmar in 2023, with 2.7 million tons already arriving by December 2023. An additional 500 thousand tons have entered the country this year. These imports, the largest in 25 years, were intended to ensure sufficient rice supply. However, the influx of imported rice has coincided with high prices and difficulties in obtaining rice.

According to Andreas’ calculations, Indonesia’s rice stock is actually sufficient to face the upcoming Ramadan and Eid al-Fitr holidays. Producers and traders currently hold around 4.7 million tons of rice.

Distribution Challenges

Suharini Eliawati, the head of DKI Jakarta Provincial Food and Agriculture Security Service (DKPP), attributed the scarcity of rice in minimarkets across Jakarta to climate change and the delayed harvest period. The harvest season is expected to begin in March 2024.

Eliawati explained that the new harvest season in March has led to reduced merchant activities due to the long holiday and the need for retailers to restock rice. “The main harvest period has not yet arrived, and it is estimated to occur next month, leading to an imbalance between supply and demand,” she said.

Scarcity of rice in minimarkets has also been observed in two sub-districts in Tangerang City, specifically in Cipondoh District and Pinang District. However, traditional markets in Tangerang City have not been affected by the rice shortage.

The acting mayor of Tangerang, Nurdin, assured the public that the scarcity of rice is not affecting traditional markets. The local government is taking measures to distribute 5 kg bags of rice at prices below the market rate in order to alleviate concerns.

According to Nurdin, the Tangerang City Government, in collaboration with Bulog, has implemented the Cheap Food Movement (GPM) to address the scarcity of rice. This movement is being carried out in 104 urban villages across the city.

“We will hold a bazaar in collaboration with Bulog to realize the Cheap Food Movement (GPM). This activity will be conducted simultaneously in 104 urban villages in Tangerang City,” Nurdin explained.

Rice Inspection at Cipinang Main Market

Awaludin Iqbal, the Corporate Secretary of Perum Bulog, confirmed the scarcity of rice and referred to a broadcast from Perum Bulog on February 15. The broadcast highlighted the scarcity of rice, which caught President Joko Widodo’s attention. The president visited the Cipinang Rice Main Market in East Jakarta to personally check the availability of rice reserves and observe the government’s Food Supply and Price Stabilization (SPHP) program.

During his visit, President Jokowi clarified that the increase in rice prices was due to low yields and disrupted distribution lines caused by floods in areas such as Demak and Grobogan. He denied the assumption that the government’s provision of food assistance contributed to the rise in prices, emphasizing that it was actually an effort to control prices by increasing supply.

President Jokowi declared, “I came to the Cipinang Main Market to ensure that there is sufficient rice stock here because it is distributed to retailers, supermarkets, and regions from this market. I want to make sure that there is an abundant and adequate rice supply,” according to a press release.

To read the original article, click [here](https://voi.id).