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Indonesia replaces Bulog food agency chief after rice target missed
June 8, 2015 / 10:22 AM / 2 years ago

Indonesia replaces Bulog food agency chief after rice target missed

JAKARTA, June 8 (Reuters) - The head of Indonesia’s state food procurement body has been removed after just five months in the role, the deputy state-owned enterprises minister said on Monday, citing missed targets for domestic rice-buying.

Former banker Lenny Sugihat replaced retiring Bulog chief Sutarto Alimoeso in January, with a remit to buy rice and other food staples from domestic farmers to stabilise retail prices.

Former Bank Rakyat Indonesia director Djarot Kusumayakti was inaugurated as Sugihat’s replacement on Monday, a state-owned enterprises ministry statement said.

The government had given Bulog a rice-buying target of 4 million tonnes from domestic producers for 2015, but the agency had only managed to procure 1.2 million tonnes by the end of May, deputy minister Muhamad Zamkhani told reporters.

Bulog is the dominant rice buyer, tasked with maintaining annual stocks of 1.5-2 million tonnes by buying from both domestic and regional suppliers.

In the past, Indonesia has imported 1 million to 2 million tonnes a year, usually from Thailand or Vietnam, and replacing Sugihat may be a sign that imports are now likely.

Sugihat is one of the first prominent government officials to be appointed and then replaced by President Joko Widodo, who took office last October.

Widodo’s administration has been criticised for underperforming and failing to revive an economy that is at its weakest since 2009.

Analysts have said Indonesia could ship in as much as 1.6 million tonnes of rice this year due to soaring prices at home and the threat of damage or delays to harvests from an El Nino weather pattern.

Retail rice prices in Indonesia have gained about 13 percent in the past year and industry sources expect further climbs of 5-7 percent around the Muslim festival of Ramadan, which starts in mid-June. (Additional reporting by Cindy Silviana; Writing by Michael Taylor; Editing by Alan Raybould)

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