G/STR/N/16/IDN  
 
1 Novembe r 2016 
(16-5997) Page: 1/6 
Working Party on State Trading Enterprises  Original: English  
 
STATE TRADING  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVII:4(A) OF T HE 
GATT 1994 AND PARAGR APH 1 OF THE UNDERST ANDING ON  
THE INTERPRETATION O F ARTICLE XVII  
INDONESIA  
The following communication, dated 20 October 2016 , is being circulated at the reque st of the 
Delegation of Indonesia . 
 
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I. ENUMERATION OF STATE  TRADING ENTERPRISE  
A. Identification of State Trading Enterprise  
Perum BULOG, as State Trading Enterprise.   
 
B. Description of products affected (including tariff item number(s)  encompass in 
product description)  
Rice (HS 1006).  
 
II. REASON AND PURPOSE  
A. Reason or purpose for establishing and/or maintaining state trading enterprise  
 The purpose of establishing Perum BULOG as a State Trading Enterprise (STE), is to 
conduct good qua lity and sufficient staple food logistics businesses for all society 's 
needs; and in some cases, to conduct particular tasks given by the Government in light 
of stabilizing staple food prices, managing government food reserves and distributing 
staple food to low income people, particularly rice and other staple food items 
determined by the Government in the pursuit of achieving national food security;  
 In implementing its statutory functions, the agency engages in domestic procurement, 
sales/distribution, im port/export and public  stockholding.  
B. Summary of legal basis for granting the relevant exclusive or special rights or 
privileges, including legal provisions and summary of statutory or constitutional powers  
The operations of Perum BULOG are governed by t he recent State -Owned Enterprise Law 
No. 19/2003, the provisions of Food Law No. 18/2012, the Presidential Instruction No. 3/2012 and  
the Presidential Instruction  No. 5/2015. BULOG was established un der the Presidential Decree 
No. 114/U/Kep/5/1967. Since 2 003 BULOG was transformed from a non -departmental government 
agency into a State -Owned Enterprise, namely Perum BULOG by Government Regulation (PP) 
No. 7/2003, as amended by Gove rnment Regulation No.  61/2003.  
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  III. DESCRIPTION OF THE F UNCTIONING OF THE ST ATE TRADING ENTERPRI SE 
A. Summary statement providing overview of operations of the state trading 
enterprise  
 Conducting domestic paddy/rice procurement for defending guaranteed price;  
 Ensuring domestic rice price stabilization;  
 Carrying out domestic paddy/ rice procurement with the Government Purchase Price;  
 Distributing rice for poor and vulnerable people, Internally Displaced Persons (IDP's), 
and victims of natural calamities and social conflicts;  
 Maintaining national reserve stockholding for food security  purposes;  
 Undertake government mandate to import for price stabilization to ensure food security 
objective.  
B. Specification of exclusive or special rights or privileges enjoyed by the state 
trading enterprise  
 Undertake the government mandate to import/ex port and distribute rice, maintain 
national public stock for the price stabilization program me and food security purposes;  
 In conducting its operations, Perum BULOG's source of funding comes from the state 
budget.  
C. Type of entities other than the state t rading enterprise that are allowed to engage 
in importation/exportation and condition for participation  
Private sectors as well as STE Perum BULOG are given equal rights to the import and export of 
food commodity, subject to special restrictions or guideli nes set by the government.   
 
D. How import/export levels are established by the state trading enterprise  
The general rules for the import and export of rice is that such activities are very much determined 
by various factors, among others: the level of do mestic rice production, demand of rice, 
government food policy, etc. Perum BULOG is only an implementing government agency to import 
or export rice. Should there be a lack of supply based on projected production, import of rice is 
necessary. On the other h and, if ample supply is available due to good harvest and the price of 
rice reaches acceptable level for both seller and buyer, export can then be carried out.   
 
E. How export prices are determined  
Under the national regulations, the prices can be based o n agreed types of transactions between 
both parties by considering many factors through tendering and/or others. Until this moment, 
Perum BULOG has not  been assigned by the Government of Indonesia to export rice.  
 
F. How the resale prices of imported produ cts are determined  
The resale prices of imported product are determined by considering the level of domestic rice 
price in order to avoid market disruption.   
 
G. Whether long -term contracts are negotiated by the state trading enterprise. 
Whether the state  trading enterprise is used to fulfil contractual obligations entered into 
by the government  
Perum BULOG, as an implementing government agency, negotiates contracts or carries -out 
transactions to fulfil contractual obligations entered into by the governmen t, such as G to G basis, 
counter trade, food aid, etc.   
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  H. Brief description of market structure  
Ever since the liberalization of rice trade, the Government of Indonesia has encouraged private 
sectors and cooperatives to participate in the local rice mar ket. This has created a competitive 
market involving many players in the rice industry, including rice producers, collectors, processors 
and traders. When the market fails to function properly, especially at times when prices tend to be 
instable at produce r or consumer level, Perum BULOG intervenes the market and smooth out the 
price fluctuations.   
 
IV. STATISTICAL INFORMAT ION (SEE ATTACHED TA BLES I -III) 
See attached Tables I, II and III.   
 
V. REASON WHY NO FOREIG N TRADE HAS TAKEN PL ACE (AS APPROPRIATE)  
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VI. ADDITIONAL INFORMATI ON (AS APPROPRIATE ) 
 
 
  
  G/STR/N/16/IDN  
 
- 4 - TABLE I  
STATE TRADING: BULOG  
STATISTICAL INFORMATION, IMPORTS  
Year Description of product(s)  
(including HS number (s))  Total Quantity  
Imported  
(MT)  Quantity imported by  
state trading 
enterprise  
(MT)  Average  
Import  
price1) 
(US $/MT)  Average representative  
domestic sales price2) 
(US $/MT)  Mark Up  National  
Production3) 
(MT)  
1 2 3 4 5 6 7 8 
2014 Rice (HS 1006)  844,164  424,997  504 643   40,004,165  
2015  861,601  816,960  453 627   42,574,145  
Average  852,883  620,978  479 635   41,289,155  
 
Notes:  
1) Rice price FOB at Bangkok for 25% broken plus insurance & transportation cost.   
2) Price of rice (quality IR III) at PIC (Cipinang Wholesale Market, Jakarta).  
3) Total production less 10% fo r seed, animal feed, loss.   
 
Source:  
a) 2014-2015 BPS for total import.  
b) Grain Re port USDA for import price.  
c) Bulog for domestic sales price at wholesale PIC (Cipinang Wholesale Market, Jakarta); and import by STE.  
d) BPS (Central Bureau of Statistic s) for national production.  
 
  
  G/STR/N/16/IDN  
 
- 5 - TABLE II  
STATE TRADING: BULOG  
STATISTICAL INFORMATION, EXPORTS  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Year Description of 
product(s) 
(including HS 
number (s))  Total 
Quantity 
Exported  
(MT)  Quantity exported by 
state trading 
enterprise  
(MT)  Average 
procurement  
price  
(US $/MT)  Average represe ntative 
domestic sales price1) 
(US $/MT)  Average export price  
(US $/MT)  National  
Production2) 
(MT)  
1 2 3 4 5 6 7 8 
2014 Rice (HS 1006)  None None 557 643 None 40,004,165  
2015 None None 545 627 None 42,574,145  
Average  None None 551 620 None  41,289,155  
 
Notes:       
  
1) Price of rice (quality IR III) at PIC (Cipinang Wholesale Market, Jakarta).  
2) Total production less 10% for seed, animal feed, loss.  
Source:  
a) 2014-2015 BPS for total import.  
b) Grain Report USDA for import price.  
c) BULOG for  domestic sales price at wholesale PIC (Cipinang Wholesale Market, Jakarta); and import by STE.  
d) CBS (Central Bureau of Statistics) for national production.   
  G/STR/N/16/IDN  
 
- 6 - TABLE III  
STATE TRADING: BULOG  
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES  
 
Year Description of product(s)  
(including HS number (s))  Domestic purchases by  
state trading enterprise  
(MT)  National  Production1) 
(MT)  Domestic sales by  
state trading enterprise  
(MT)  National  Consumption  
(MT)  
1 2 3 4 5 6 
2014 Rice (HS 1006)  2,372,004  40,004,165  3,103,783  31,268,435  
2015 2,682,531  42,574,145  3,570,648  31,677,251  
Average  2,527,268  41,289,155  3,337,215  31,472,843  
 
Note:  
1) Total production less 10% for see d, animal feed, loss, etc.  
 
Source:  
a) BULOG for domestic p urchases and domestic s ales. 
b) BPS (Central Bureau of Statisti cs) for national production.  
c) Ministry of Agricultu re for national consumption.  
 
 
 
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