Rice is a crucial commodity, particularly for Asia where most of the population is dependent on rice as the basic staple food that is consumed on a daily basis (and usually multiple times per day). It is estimated that more than 90 percent of rice is produced and consumed in Asia. Hence, rice consumption and production in the West is rather insignificant (although rice does have a centuries-long history in the West and thus there also developed specific European rice culinary specialties such as the risotto in Italy or the paella in Spain). Thus, rice-producing Asia is a net exporter of rice to the rest of the world.

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Andi Amran Sulaiman, Indonesia's Agriculture Minister, says Indonesia is ready to become a rice exporter after Indonesia managed to become self-sufficient in rice in 2016. Last year Indonesia produced a total of 79.17 million of unmilled tons of rice, significantly above the government target that was set at 72 million tons. Although Indonesia is the world's third-largest rice producer the country usually needs to import rice from Vietnam or Thailand to maintain stable prices and meet huge rice demand at home. Rice is the staple food of basically all Indonesian people.

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Rice reserves in Indonesia need to be pushed to higher minimum levels. Currently the nation's rice stocks are estimated to range between 300,000 - 400,000 tons (per year). Given that Indonesia's agricultural output is being plagued by weather phenomenons, the existing low level of rice reserves can cause major problems. Rice, the favorite staple food crop of the Indonesian people, can cause accelerated inflation in times of shortages and push the millions of people living just above the poverty line into full poverty.

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In order to avert a spike in inflation and social unrest, Indonesian President Joko Widodo may feel forced to allow around 1.5 million metric tons of rice imports in 2015 as domestic prices of rice have been rising on sluggish local harvests. Moreover, an intensifying El Nino is expected to cause dry weather in the months ahead hence further jeopardizing rice productivity. These already tough conditions will be exacerbated by seasonal Islamic celebrations (Ramadan and Idul Fitri) that always trigger increased consumption of food products.

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The price of rice in several Indonesian regions has risen by between 17 to 23 percent to IDR 8,500-9,000 per kilogram as rice production at the start of the year has not been able to meet rice demand. In January 2015, Indonesian rice production stood at 2 million tons, whereas demand reached 2.5 million tons. Inflation of rice is a sensitive issue in Indonesia because it jeopardizes declining poverty rates as poorer segments of Indonesian society spend over half of their total disposable income on food items, primarily rice.

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Rice, a cereal grain that is cultivated extensively in warm climates, has always been a crucial food commodity for Indonesians, as the majority of Indonesians (whether rich or poor) eat rice two (or three) times per day. Rice is, in fact, the cornerstone of Indonesia’s food culture, especially in the rural areas.

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