The National Rice Market Fluctuates Amid Uncertainty

JAKARTA, KOMPAS – The rice market is currently in turmoil facing uncertainty. The limited paddy from farmers is being contested and purchased at high prices. Some rice producers have begun to withdraw rice that does not comply with regulations and temporarily halt their production. Moreover, there is potential for producers to withhold rice stocks while awaiting new rice policies.

The behavior of the rice market has emerged amid the ongoing second planting season (MT II) of rice. Concurrently, law enforcement is also intensifying actions against those involved in the illegal mixing of rice that does not comply with regulations.

The government is also developing a new policy to eliminate medium and premium rice, leaving only regular and specialty rice. Currently, the quality standards and ceiling price for regular rice, based on these zones, are being finalized.

The management of the Indonesian Seed and Agricultural Technology Bank Association (AB2TI) in West Java, Masroni, stated on Tuesday (5/8/2025) that currently, most areas in West Java are in the MT II phase of rice cultivation. The age of the rice plants ranges from 35 to 40 days.

The harvest of rice from MT II is expected to occur only at the end of September 2025. This results in a limited availability of dry harvested grain (GKP) at the farmer level, causing prices to be high, around Rp 7,400-Rp 7,600 per kilogram (kg).

"Rice harvests are present, but they are limited. Farmers' unhusked rice is being contested and purchased at high prices by rice mills that still have substantial capital," he stated when contacted from Jakarta.

Our rice mill has also stopped producing rice until the next harvest. Our stock of unhusked rice is empty. If we want to buy unhusked rice, the price is high. We could end up incurring losses.

Masroni explained that during the harvest of the first planting season, the farmers' rice was largely absorbed by Perum Bulog. As a result, rice producers and private rice mills did not receive much rice from the farmers.

Therefore, during this harvest season, those with sufficient capital are hunting for and purchasing rice at high prices. The aim is to strengthen stock and maintain business sustainability. Conversely, some small-capital rice mills have temporarily ceased operations.

"Our rice mill has also stopped producing rice until the next harvest. Our stock of unhusked rice is empty. If we want to buy unhusked rice, the price is high. We could end up incurring losses," said Masroni, who is also the President Director of PT AB2TI Petani Sejahtera Nusantara.

He estimates that the price of farmers' GKP in West Java before the harvest at the end of September 2025 could exceed 8,000 per kg. If the paddy is processed into medium rice, the price of that rice could be double, reaching Rp 16,000 per kg. Meanwhile, the highest retail price (HET) for medium rice is Rp 12,500-Rp 13,500 per kg, depending on the zoning.

The Indonesian Rice Milling and Rice Entrepreneurs Association (Perpadi) shares a similar opinion. Perpadi even warns of the limited potential for rice circulation in the market due to the impacts of the mixed rice case that does not comply with regulations and the new rice policy plans.

The Chairman of Perpadi, Sutarto Alimoeso, acknowledged that currently, the price of farmers' rice is very high. Small rice mills can no longer afford it. Only well-capitalized mills are able to purchase the farmers' rice.

"Indeed, the majority of rice mills in Indonesia are small rice mills. The number of small rice mills is approximately 161,000 out of a total of 169,000 mills in Indonesia," said Sutarto.

He also revealed that, at the same time, several large rice producers involved in the alleged mixed rice case that does not comply with regulations have begun to withdraw their rice products. They do not want to take risks even though the government has urged that the rice can still be sold at a reduced price.

In fact, there's a potential for rice producers to hold back their stocks. They're awaiting clarification on the new policy regarding quality standards and ceiling prices for regular rice. They're concerned that the rice distributed to the market won't meet the new quality standards and benchmark prices.

"The rice market is currently facing uncertainty. The availability of unhusked rice during the second planting season is limited. Cases of adulterated rice that do not comply with regulations have emerged, and market players in the rice sector are awaiting clarity on new rice policies," said Sutarto.

Based on data from the Food Price Panel of the National Food Agency (Bapanas), as of August 5, 2025, the national average price of GKP at the farmer level is Rp 6,850 per kg, which is 5.38 percent above the government purchase price (HPP) of Rp 6,500 per kg. The highest GKP prices are found in Aceh and East Java, at Rp 7,500 per kg and Rp 7,153 per kg, respectively.

Meanwhile, the national average price of medium rice is Rp 14,426 per kg, which is 15.41 percent above the national highest retail price (HET) for medium rice set by the government at Rp 12,500 per kg. The price of medium rice in several rice-producing regions, such as East Java, West Java, and Central Java, has reached 6.83 percent, 8.19 percent, and 8.23 percent above the HET, respectively.

The rice market is currently facing uncertainty. The availability of unhusked rice during the second planting season is limited. Cases of mixed rice that do not comply with regulations have emerged, and market players in the rice sector are awaiting clarity on new rice policies.

Kompas has found that stocks of premium rice are starting to dwindle in modern retail markets in several regions across Indonesia. In South Tangerang, Banten, for example, stocks of several medium and premium rice varieties, whose prices have been reduced, are dwindling at two minimarkets and a wholesale supermarket.

A similar situation occurred in Bandar Lampung, where stocks of medium and premium rice in 5 kg and 10 kg packages sold at several modern retailers were down to fewer than 10 packages. Furthermore, not all rice brands were available (Kompas, 5/8/2025).

In Makassar, South Sulawesi, premium rice, usually widely available in supermarkets, is now scarce. Only medium-grade rice is generally displayed. In one supermarket, premium rice is only sold in 5-kg packages. Purchases are limited to one 5-kg package per person (Kompas, 4/8/2025).

Sutarto and Masroni expressed their concerns that if not addressed promptly, the rice stock in the market will continue to dwindle, leading to a rice shortage. Therefore, to maintain the stock and price of rice, they urged the government to intervene in the rice market immediately.

"The government's rice stock at Perum Bulog is very large, amounting to approximately 3.9 million tons. Conduct massive market operations throughout Indonesia. The timing is right, as the harvest of the second planting season has not yet taken place," said Sutarto.

In addition, Sutarto as well as Masroni also proposed that the government promptly announce a new policy regarding quality standards and the upper price limit for regular rice based on zoning. The aim is to provide certainty to the actors in the rice market.

The Deputy for Food Availability and Stabilization of Bapanas, I Gusti Ketut Astawa, stated that Bapanas has requested producers and retailers to continue conducting rice sales transactions in warehouses and stores as usual. Rice that is indicated to violate regulations must have its price adjusted according to the contents of the packaging.

"The rice can still be sold, but the price will be reduced by Rp 1,000 per kg. This has been implemented across all retail stores. The policy aims to ensure the availability of rice in the market," he stated at a press conference in Jakarta on Tuesday.

In addition, Ketut continued, the National Food Agency also sent a letter to governors, regents, and mayors across Indonesia on August 4, 2025. The agency requested that they strengthen the monitoring of rice stock availability and prices in the market to anticipate shortages and price increases of rice.

Regarding the new rice policy, Bapanas has submitted the results of its discussions to the Coordinating Ministry for Food Affairs. Subsequently, the policy will be discussed together with President Prabowo Subianto.

In response to this, Coordinating Minister for Food Zulkifli Hasan stated that discussions are still being refined, particularly regarding the calculation of the HET. However, when asked when the new policy would be announced, Zulkifli could not confirm the timing.