Indonesia to Release Rice Reserves to Combat Rising Prices
In a decisive move to stabilize the domestic rice market and curb surging prices, the Indonesian government is set to release a substantial volume of rice from its national reserves. As confirmed by presidential spokesperson Hasan Nasbi, a total of 1.3 million tons of rice will be injected into the market in a phased approach from August through December. This significant intervention comes as a direct response to a nationwide surge in rice prices, where both premium and medium-grade varieties have exceeded their government-mandated retail price ceilings, putting a strain on household budgets. The phased distribution is designed to ensure a steady supply of rice over the coming months, alleviating market pressure and helping to bring prices back down to a more stable and affordable level. This action is a clear signal of the government’s commitment to food security and its willingness to intervene in the market to protect consumers from the impact of inflation on essential goods.
A Paradox of Rising Prices Amidst High Domestic Production
This government intervention is occurring under unusual circumstances, given the country’s strong agricultural output. The decision to release national rice reserves comes despite a remarkable increase in domestic rice production. In the first seven months of 2025, the country’s rice production surged by an impressive 14%, reaching 21.7 million tons. The government’s projection for the entire year is even more promising, with total production expected to hit 35.6 million tons. These figures are so robust that the government anticipates its national rice reserves will accumulate to nearly 10 million tons by the end of the year, a volume so large that the country will not need to rely on imports. The fact that price hikes are occurring in a period of such high domestic output is a notable and complex development, suggesting that the issue is not a simple matter of supply shortage but is instead driven by other, more complicated market dynamics.
Government Cracks Down on Market Fraud and Manipulation
In addition to its market intervention, the government is taking a firm stance against fraudulent practices that may be contributing to the instability. President Prabowo has given a direct order to law enforcement agencies to take strong action against legal violations committed by rice producers and distributors. This directive aims to prosecute fraudulent activities, such as mixing low-quality rice into premium-grade packaging or intentionally underfilling rice packages to manipulate supply and pricing. This presidential directive follows a recent police investigation that named three senior executives of a state-linked company as suspects in a major rice fraud case. This two-pronged approach—addressing both the supply and integrity of the market—demonstrates the government’s comprehensive strategy to not only stabilize prices in the short term but also to restore confidence in the national rice supply chain by ensuring fair and legal practices for both producers and consumers, paving the way for a more trustworthy and predictable market environment.
