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Country Briefs

  Indonesia

Reference Date: 24-July-2020

FOOD SECURITY SNAPSHOT

  1. First main season 2020 paddy rice production estimated at below‑average level due to rainfall deficits

  2. Cereal imports requirements in 2020/21 anticipated slightly above‑average

  3. Prices of rice increased between January and April 2020, but softened in May‑June

First main season 2020 paddy rice production estimated at below‑average level due to rainfall deficits

Harvesting of the 2020 first (main) paddy crop was delayed by about two months in some areas as the cropping cycle started late due to below‑average rains between October and December 2019 that affected planting operations. Rains improved in January 2020, bringing some relief to the areas affected by dry weather conditions and allowed planting operations to progress. However, the area planted is estimated at a below‑average level. In addition, the dry weather conditions at the start of the season also affected yields. As a result, the output of the 2020 main season paddy is estimated below the previous five‑year average.

Planting of the 2020 second paddy crop started with delays due to the late harvest of the main season crop. Overall, production prospects are favourable as precipitations have been near‑average since May 2020 and seasonal weather forecasts point to average to above‑average rains across the main producing areas for the July‑September 2020 period. This is expected to improve water availabilities for irrigation in the main reservoirs and boost soil moisture reserves in the rainfed areas. Planting operations of the 2020 third paddy crop normally begin in August.

Harvesting of the 2020 main maize crop is about to conclude. Early rainfall deficits caused delays in planting operations. Near‑average rains from January 2020 allowed planting to progress and benefitted yields. Farmers have reported increased Fall Armyworm infestations in parts of the main producing areas of Java and Sumatera, which resulted in localized reductions of yields. The 2020 off‑season maize crop is growing under generally favourable weather conditions. Overall, the output of maize is forecast at an above‑average level, reflecting high plantings driven by the steady demand of the feed industry.

Cereal import requirements in 2020/21 anticipated slightly above‑average

The country is one of the largest importers of cereals in Southeast Asia. Total cereal import requirements in the 2020/21 marketing year (April/March) are estimated at 13.4 million tonnes, slightly above the five‑year average.

Import requirements of wheat, which is not produced in the country, are estimated at 11.1 million tonnes in the 2020/21 marketing year (April/March), about 6 percent above the five‑year average, on account of sustained demand for food and feed use. Imports of rice in the 2020 calendar year are forecast at 1.4 million tonnes, 960 000 tonnes above the 2019 level. For maize, import requirements in 2020 are estimated at 900 000 tonnes, close to the five‑year average.

Prices of rice increased between January and April 2020, but softened in May‑June

Prices of rice increased between January and April 2020, reflecting harvest delays and expectations of a reduced output of the 2020 main season crop. Strong domestic demand and supply disruptions related to the COVID‑19 pandemic also added to the upward pressure. Subsequently, prices of rice showed signs of softening in May and June 2020, weighed by the arrival into the markets of the main season harvest. Overall, prices of rice in June 2020 were close to their year‑earlier levels. In an effort to stabilize domestic prices of rice amid the COVID‑19 pandemic, the State food procurement agency BULOG, decided to increase the selling of rice into the local markets.

COVID-19 and measures adopted by the Government

In an attempt to contain the spread of the COVID‑19 pandemic, the Government adopted various measures, including temporary bans on domestic and international travel, closure of educational institutions and restrictions on public events. Generally, economic activities deemed non‑essential were restricted, but productive and commercial activities along the food supply chain were allowed to operate. In early June 2020, the Government issued the “new normal” guidelines, for a gradual easing, by phases, of all restrictive measures.

As of May 2020, the Government has allocated a total of IDR 405 trillion (USD 27.8 billion) for COVID‑19 responses. The budget allocated to support the health sector amounted to IDR 75 trillion (USD 5.2 billion), social safety nets amounted to IDR 110 trillion (USD 7.6 billion), tax incentives and stimulus for the industry totaled IDR 70 trillion (USD 4.8 billion) and IDR 150 trillion (USD 10.3 billion) were allocated to support economic development.

To support the most vulnerable households, the Government allocated of IDR 110 trillion (USD 7.6 billion) to the existing safety net programmes, including the Staple Food Card, the Family Hope Programme (PKH), the pre‑employment card, village level direct assistance and the President’s social assistance. These programmes assist about 70 million poor people through the distribution of free staple food and cash transfers.

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