Thailand is attempting to persuade Indonesia to allow the import of 50,000-100,000 tonnes of hom mali and other premium-grade rice annually to increase the value of Thailand's rice exports to Jakarta markets and serve the rising demand from high-ended consumers.

Currently, Thai rice exports to Indonesia are lower-quality varieties.

Thailand Trade Representative Suthad Setboongsarng said Indonesia was a fast-growing market. Thai premium-grade rice should have more opportunity to penetrate the market, but Jakarta has not allowed imports of high-quality rice from Thailand, but only low- and middle-grade grains. Currently, the only imports of premium-grade rice allowed are Basmati from India and short-grain rice from Japan.

Despite the Asean Free Trade Agreement, Indonesia has categorised rice as a highly sensitive product. Thai rice is subject to a high import tariff of 30-35 per cent. Indonesia will cut the tariff for rice imports to 25 per cent by 2015.

Adjustment of the rice import allowance requires approval of the Indonesian trade minister and imports must be made by the state-owned Bulog Public Company only.

Suthad said the Indonesian market had wide variations. As an emerging nation, 10 per cent of its large population of more than 240 million have high purchasing power, and there is increasing demand for high-quality rice such as hommali. Thai rice exports to the market should increase significantly if Indonesian importers could bring in premium-grade rice from Thailand.

Indonesia consumes about 35 million tonnes of rice a year, or 130 kilograms per capita.

After surveying the rice market |in Jakarta, Suthad found increas-|ing demand for high-quality and organic rice. As the world's largest |rice exporter, Thailand should have greater opportunities to grow in |the market by supplying hommali and speciality organic rice.

Indonesia does offer fragrant rice to consumers. However, this is not marketed under the brands of Thai exporters.

Normally, importers purchase rice in bulk and repackage it under their own brands. Suthad suggested that Thai rice exporters to do more marketing of their brands in the Indonesian market.

Only a few brands of Thai white rice are available in Indonesia, including Royal Umbrella of CP Intertrade and Si Pulen (Royal Bee), which belongs to Ponglarb.

Meanwhile, to increase export growth and help strengthen the farming industry in Indonesia, Thailand has asked Jakarta to allow import of agricultural tools, equipment, and machinery.

The Indonesian government has stringent import rules for farm |tools and equipment. Currently only three companies, PT Perusah-gan Perdagargan Industry, PT MeganEltra and PT Sarinah, are allowed to import agricultural tools.

However, Thai products cannot enter the market. Last year, Indonesia imported only US$30,000 (Bt905,000) of farm equipment, from Singapore, Malaysia, Australia and the United States.

To explore trading opportunities, 30 Thai agricultural machinery and implement enterprises will visit Jakarta next month.

Source: The Nation