Indonesia will scrap import duties on wheat, soybeans and livestock feed, the country's chief economic minister said on Friday, in a measure to try to improve domestic food supplies and head off possible protests over rising costs.
"The policy will be effective starting next week," said Hatta Rajasa at a press briefing after the cabinet met this week to discuss food price stability, adding it had not decided yet whether to scrap duties on sugar.
Indonesia, Southeast Asia's largest economy, is reliant on imports of sugar, soybeans and wheat, and sometimes imports rice and corn. Food price protests were seen a factor in the ousting of Indonesia's long-term autocrat Suharto in 1998.
Rising food costs helped drive annual December inflation to a 20-month high near 7 percent, putting food supply at the top of policymakers' agendas.
The United Nations' food agency (FAO) said on Wednesday that food prices hit a record high last month, exceeding 2008 levels when riots broke out in various countries.
The government expects food price pressures to subside when the local harvest season starts in February, though it has promised to maintain supplies and has increased rice distribution.
Indonesia plans to import 450,000 tonnes of white sugar for household consumption to bridge an anticipated shortfall in local production, though failed to secure 60,000 tonnes in a tender last month because prices were too high.
Prolonged wet weather last year reduced production of the country's key agriculture commodities and forced it to import to meet the shortfall.Source: Reuters
"The policy will be effective starting next week," said Hatta Rajasa at a press briefing after the cabinet met this week to discuss food price stability, adding it had not decided yet whether to scrap duties on sugar.
Indonesia, Southeast Asia's largest economy, is reliant on imports of sugar, soybeans and wheat, and sometimes imports rice and corn. Food price protests were seen a factor in the ousting of Indonesia's long-term autocrat Suharto in 1998.
Rising food costs helped drive annual December inflation to a 20-month high near 7 percent, putting food supply at the top of policymakers' agendas.
The United Nations' food agency (FAO) said on Wednesday that food prices hit a record high last month, exceeding 2008 levels when riots broke out in various countries.
The government expects food price pressures to subside when the local harvest season starts in February, though it has promised to maintain supplies and has increased rice distribution.
Indonesia plans to import 450,000 tonnes of white sugar for household consumption to bridge an anticipated shortfall in local production, though failed to secure 60,000 tonnes in a tender last month because prices were too high.
Prolonged wet weather last year reduced production of the country's key agriculture commodities and forced it to import to meet the shortfall.Source: Reuters
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