Indonesia plans to acquire some Cambodian rice producers

Indonesia's state food logistics company Bulog is conducting an in-depth study on a plan to acquire several rice producers in Cambodia to meet domestic rice demand.

Bulog CEO Bayu Krisnamurthi was quoted by local media as saying that his company has sent a technical team, conducted an intensive study, and held discussions with relevant stakeholders in Cambodia. The stakeholders include Cambodian businesses and neighbouring countries that have established business cooperation with Cambodia.

Krisnamurthi said there are several factors that Bulog will need to consider before making a final decision about acquiring rice firms in Cambodia.

First, Cambodia's rice production capacity is still relatively small compared to other rice producers, such as Thailand and Vietnam. The second issue is the limited infrastructure to support the rice production process.

Some infrastructure is planned to be built, but currently, there is none, including ports, roads, and electricity - even though these are very important for the rice business, he explained.

In addition, Cambodia has close relations with Vietnam, especially in the agricultural sector. Vietnam's involvement in agribusiness activities in Cambodia means that Bulog will face tough competition if it enters the market. Vietnam is also an important rice supplier for Indonesia.

Krisnamurthi said that President Joko Widodo has ordered Bulog to acquire several rice producers in Cambodia, stating that this would help support national food security and ensure sufficient rice stocks.

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

Rice production in Indonesia has fluctuated due to several factors, such as the climate crisis, declining agricultural land and soil conditions, and irrigation issues.

This caused rice production to shrink by 17.54% from January to April, compared to 22.55 million tonnes during the same period last year.

This year, Bulog was granted approval to import 3.6 million tonnes of rice.