Indonesia's rice producer plan in Cambodia could falter

Export quotas, local laws may scupper move to acquire firms there to shore up supplies

- Linda Yulisman

Indonesia’s recent plan to acquire Cambodian rice companies to shore up its supplies may hit a snag due to export restrictions and local land ownership laws, experts say.

Bulog, a state-owned logistics agency, has begun talks with several Cambodian rice companies and some Indonesian banks about the acquisition plans. Bulog president director Bayu Krisnamurthi told The Straits Times that it is still early days and the matter will be discussed with all relevant parties in stages.

The wheels were set in motion after outgoing President Joko Widodo asked Bulog on June 10 to consider acquiring a rice producer in Cambodia to ensure that the country’s rice reserves are at a “safe level”.

Indonesia, the world’s fourth-biggest rice producer and the third-largest consumer of rice, plans to import more than 3.6 million tonnes of rice in 2024, in anticipation of a smaller harvest due to droughts, and to maintain stable prices for consumers, officials said.

In 2023, Indonesia produced 31.1 million tonnes of rice, up 1.4 per cent from 2022, according to Statistics Indonesia. The fourth most-populous nation in the world consumes about 30 million tonnes of rice annually.

Rice is a crucial staple for many in Asia. Indonesia imports less than 5 per cent of its total national needs, Mr Widodo said in May. From January to May 2024, Indonesia bought the most rice from Thailand, followed by Vietnam, Pakistan and India, with Cambodia a distant fifth, according to Statistics Indonesia.