Indonesia’s Bulog studies acquisition of Cambodian rice producer

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JAKARTA (ANTARA) – Indonesia’s state-owned food logistics company Bulog is delving into plans to acquire several rice producers in Cambodia to meet domestic rice demand.

In a media discussion on Friday, Bulog CEO Bayu Krisnamurthi revealed that his company had sent a technical team to conduct in-depth research and hold discussions with relevant stakeholders in Cambodia.

Stakeholders include Cambodian companies and neighboring countries that have established business cooperation with Cambodia.

Krishnamurthy said Blog had to consider several factors before making a final decision to acquire Cambodia Rice Company.

First, Cambodia’s rice production capacity is still relatively small compared to rice producing countries such as Thailand and Vietnam. Second, the infrastructure to support the rice production process is limited.

“There are plans to build some infrastructure, but it doesn’t exist yet, including ports, roads and electricity – even though these are very important for the rice industry,” he explained.

In addition, Cambodia has close relations with Vietnam, especially in the agricultural sector.

Vietnam’s involvement in Cambodia’s agribusiness activities means Bulog will face stiff competition if it enters the market. Vietnam is also a key rice supplier to Indonesia.

“So, we are still considering it. Also, we are yet to finalize the investment amount; we will continue to explore various possibilities,” Krisnamurthi said.

President Joko Widodo has ordered Bulog to acquire several Cambodian rice producers, saying it will help support national food security and ensure adequate rice stocks.

Data from Statistics Indonesia showed that national rice production will fall 1.39% to 31.10 million tonnes in 2023 from 31.54 million tonnes in 2022.

Indonesia’s rice production fluctuates due to a variety of factors, including the climate crisis, declining agricultural land and soil conditions, and irrigation problems.

This resulted in a 17.54 percent drop in rice production from January to April compared with 22.55 million tons in the same period last year.

Indonesia’s per capita rice consumption is relatively high compared to other countries. In addition, the rapid population growth has also driven the continued growth in rice demand.

Rice imports are being carried out to bridge the gap between production and sales to ensure that there is no shortage that would lead to a sharp increase in rice prices.

This year, Bulogh is allowed to import 3.6 million tonnes of rice.

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