Nusa Dua, Indonesia: Efforts by South-East Asian nations to safeguard rice exports, while boosting output over the longer term, would help stabilize soaring global prices, Indonesian trade minister Mari Pangestu said on Sunday.
Trade ministers of the 10-member Association of Southeast Asian Nations (Asean) agreed a day earlier to cooperate over the rice market, but stopped short of concrete measures to deal with rocketing prices of the region’s staple in most meals.
But Pangestu said a consensus among ministers to stabilize rice prices would send a “very important signal” to the market.
“We recognized the importance of having stable prices. Stable meaning you don’t want prices to fluctuate in either way—up or down,” she said. “We also agreed to continue fair trade practices and achieve orderly regional rice trade,” she added.
Rice prices have almost trebled this year in Asia, posing a threat to the livelihood of the poor in the developing region and fuelled fears of social unrest. It was appropriate for Asian nations to increase rice stocks to help temper domestic inflation, but they must avoid “excessive policies that will disturb the global prices ”, she said.
Countries including India, Vietnam, Indonesia and Brazil have restricted food exports in a bid to secure domestic supplies and limit inflation, but such moves have helped fuel price rises. Thai officials have pledged not to follow suit.
Thai commerce minister Mingkwan Sangsuwan said on Saturday that the country, the world’s No.1 rice exporter, could ship more rice to the world market this year compared with 9.55 million tonnes in 2007.
Indonesia has introduced several policies in a bid to contain surging food prices. It scrapped taxes on cooking oil, as well as the import duties on soya beans and wheat flour, and is curbing rice exports to help build up national stocks.
Over the longer term, Asian countries aimed to tackle fundamental factors that have fuelled price rises by boosting outlays in agricultural infrastructure and technology to enhance productivity, Pangestu said. She said Indonesia, the world’s largest palm oil producer, would safeguard its own consumption of cooking oil but it would not impose quotas to control exports.
The volume of palm oil exports would probably decline this year due to an export duty imposed in recent months, Pangestu said, but the export value may rise due to higher prices. Pangestu said Indonesia’s overall trade surplus would be largely “stable” this year and she believed that the current rupiah exchange rate was “reasonable”.
The rupiah has gained 1.7% versus the dollar so far this year, but remains a laggard after losing 4% in 2007.
While some Asian countries have opted to let their currencies rise to help rein in inflation, Pangestu cast doubt on whether Indonesia would go down the path.