G/STR/N/17/IDN  
 
19 September 2018 
(18-5777) 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 14 September 201 8, is being circulated at the request 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 affect ed (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 quality 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 foo d 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 dome stic procurement, 
sales/distribution, import/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 the recent State -Owned Enterprise 
Law No 19/2003, the provisions of Food Law No. 18/2012, the Presidential Instruction No. 5/2015 
and the President Regulation No. 48/2016. BULOG was established under the Presid ential Decree 
No. 114/U/Kep/5/1967.  Since 2003 BULOG was transformed from a non -departmental government 
agency into a State -Owned Enterprise, namely Perum BUL OG by Government 
Regulation  No. 7/2003, as amended by Government Regulation No. 61/2003.  
 G/STR/N/17/IDN  
 
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  III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE  
 
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 st abilization;  
• Carrying out domestic paddy/rice procurement with the Government Purchase Price (HPP);  
• 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 
enterpri se 
 
• Undertake the government mandate to import/export and distribute rice, maintain national 
public stock for the price stabilization programme and food security purposes;   
• In conducting its operation, Perum BULOG's source of funding comes from the state b udget 
and commercial credit based on Government  Regulations No. 13/2016.  
C. Type of entities other than the state trading enterprise that are allowed to  engage 
in importation/exportation and condition for participation  
 
Private sectors as well as STE Peru m BULOG are given equal rights to the import and export of food 
commodity, subject to special restrictions or guidelines 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 domestic rice production, demand of rice, government 
food policy, etc. Perum BULOG is only an implementing government agency to import or exp ort rice. 
Should there be a lack of supply based on projected production, import of rice is necessary. On the 
other hand, 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 on agreed types of transactions between 
both parties by considering many factors through tendering and/or others. Up until this moment, 
Perum BULOG has not been assigned by the Government of Indonesia to export rice.  
 
F. How the resale prices of imported products 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 governm ent agency negotiates contracts or carries -out 
transactions to fulfil contractual obligations entered into by the government, such as G to G basis, 
counter trade, food aid, etc.   G/STR/N/17/IDN  
 
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H. Brief description of market structure  
 
Ever since the liberalization of t rade in rice, the Government of Indonesia has encouraged private 
sectors and cooperatives to participate in local rice market. This has created a competitive market 
involving many players in the rice industry, including rice producers, collectors, processo rs and 
traders. When the market fails to function properly, especially at times when prices tend to be 
instable at producer or consumer level, Perum BULOG intervenes the market and smooth out the 
price fluctuations.  
 
IV. STATISTICAL INFORMATION (SEE ATTAC HED TABLES I -III) 
 
See attached Tables I, II and III.   
 
V. REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE (AS APPROPRIATE)  
 
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VI. ADDITIONAL INFORMATION (AS APPROPRIATE ) 
 
  
  G/STR/N/17/IDN  
 
- 4 - TABLE I  
STATE TRADING: BULOG  
STATISTICAL INFORMATION, IMPORTS  
Year Description of p roducts(s) 
(including HS number (s)) Total Quantity 
Imported  
(MT)  Quantity imported by 
state trading enterprise  
(MT)  Average Import 
Price1 (US $/MT)  Average 
Representative Price2  
(US $/MT)  Mark 
Up National 
Production3 (MT)  
1 2 3 4 5 6 7 8 
2016 
Rice (HS 1006)  1.283.179  676.695  490 606  
45.351.383  
2017 311.525  None 493 608  
46.509.813  
Average  797.352  338.348  492 607  45.930.598  
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% for seed, animal feed, loss,  etc. 
Source:  2016-2017 BPS for total Import.  
 Rice price FOB at Bangkok for 25% broken plus insurance & transportation cost for import price.  
 Bulog for domestic sales price at wholesale PIC (Cipinang Wholesale Market, Jakarta); and import by STE.  
 BPS (Central Bureau of  Statistics ) for national production .  
  G/STR/N/17/IDN  
 
- 5 - TABLE  II 
STATE TRADING: BULOG  
STATISTICAL INFORMATION, EXPORTS  
Year Description of 
products(s) (including HS 
number (s)) Total Quantity 
Exported (MT)  Quantity exported by 
state trading 
enterprise  
(MT)  Average 
procurement 
price  
(US $/MT)  Average Representative 
domestice sales price1 
(US $/MT)  Average 
export price  National 
Production2 
(MT)  
1 2 3 4 5 6 7 8 
2016 Rice 
(HS 1006)  None None 548 606 None 45.351.383  
2017 None None 565 608 None 46.509.813  
Average  None  None  557 607 None  45.930.598  
1  Price of rice (quality IR III) at PIC (Cipinang Wholesale Market, Jakarta).  
2  Total production  less 10% for seed, animal feed, loss,  etc. 
Source : Bulog administrated  price converted for procurement price.  
 Bulog for domestic sales price at wholesale PIC (Cipinang Wholesale Market, Jakarta); and import by STE.  
 BPS ( Central  Bureau of Statistics) for national production.  
 
 
 
  
  G/STR/N/17/IDN  
 
- 6 - TABLE III  
STATE TRADING: BULOG  
STATISTICAL INFORMATION,  DOMESTIC ACTIVITIES  
Year Description of products(s) (including 
HS number (s)) Domestic purchases by state 
trading enteprise (MT)  National 
Production1 (MT)  Domestic sales by state 
trading enteprise  
(MT)  National 
Consumption   
(MT)  
1 2 3 4 5 6 
2016 Rice 
(HS 1006)  2.961.505  45.351.383  3.090.742  37.800.000  
2017 2.161.225  46.509.813  2.587.014  38.000.000  
Average  2.561.365  45.930.598  2.838.878  37.900.000  
1  Total production less 10% for seed, animal feed, loss, etc.  
Source : Bulog for domestic purchases and domestic sales.  
 BPS (Central Bureau of Statistics) for national production.  
 Grain Report USDA for national consumption  
 
 
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