Rice Output in Indonesia May Fall This Year Due to Lower Yields

Unhusked rice production in Indonesia, the third-largest consumer, may decline 1.6 percent this year, reversing earlier estimates in July, because of lower yields and after farmers reduced planting.

Output may drop to 65.39 million metric tons of rice this year from 66.47 million last year, the Central Statistics Office said in its third production estimate in Jakarta today. That compares with a July forecast of 2.4 percent increase this year to 68.06 million tons.

Area planted to the crop may decline 0.2 percent to 13.2 million hectares and yields dropped 1.4 percent to 4.94 tons per hectare, the agency said today.

Reduced output from Indonesia may increase overseas purchases and help boost prices amid tight supply because of floods in Thailand, the largest exporter. The Southeast Asia’s biggest economy has sealed deals for 1.6 million tons of the grains from Thailand and Vietnam under this year’s import quota, state food company Bulog said Oct. 6.

Bulog will seek alternative supplies from India and Cambodia if Thailand cannot deliver the contracted rice because of the floods, Director General of Foreign Trade at the Trade Ministry Deddy Saleh said.

“Bulog is in talks with India right now for possible rice import to strengthen the domestic stockpiles,” Saleh told reporters in Jakarta. “If there’s no result, then they may search from Cambodia.”

Corn production may decline 6 percent to 17.23 million tons and soybean output may fall 41 percent to 870,070 tons, the statistics office said. Farmers may plant corn at 3.9 million hectares this year, a 6.3 percent drop from a year ago, while the planting area for soybean may fall 4.4 percent to 631,425 hectares.

To contact the reporters on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net; Widya Utami in Jakarta at wutami@bloomberg.net

To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberg.net

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