G/STR/N/13/IDN  
G/STR/N/14/IDN  
G/STR/N/15/IDN  
 
24 November 2014  
(14-6835)  Page: 1/6  
Working Party on State Trading Enterprises  Original: English  
 
 STATE TRADING 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVII:4(A) OF THE 
GATT 1994 AND PARAGRAPH 1 OF THE UNDERSTANDING ON 
THE INTERPRETATION OF ARTICLE XVII 
INDONESIA  
The following communication, dated 20 November 2014, is being circulated at the request of the 
Delegation of Indonesia. 
 
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1  ENUMERATION OF STATE TRADING ENTERPRISE 
1.1  Identification of St ate Trading Enterprise 
Perum BULOG, as a State Trading Enterprise.  
 1.2  Description of products affected (inc luding tariff item number(s) encompass in 
product description) 
Rice (HS 1006).  
 2  REASON AND PURPOSE 
2.1  Reason or purpose for establishing an d/or maintaining state trading enterprise 
 The purpose of establishing Perum BULOG as a State Trading Enterprise (STE) is to provide 
high quality logistical services in order to ensure sufficient staple food to meet domestic 
needs. Perum BULOG also conducts other tasks given by the Government related to the 
stabilization of staple food prices, management of government food reserves, and distribution of staple food to low-income people, particularly rice and other staple food items determined by the Government in the pursuit of national food security; 
 
 In implementing its statutory functions, the agency engages in domestic procurement, 
sales/distribution, import/export, and public stockholding.   
 
2.2  Summary of legal basis for granting th e relevant exclusive or special rights or 
privileges, including legal provisions and summa ry of statutory or constitutional powers 
The operations of Perum BULOG are governed by the State-Owned Enterprise Law No. 19/2003, 
the provisions of Food Law No. 18/2012, and the Presidential Instruction No. 3/2012. BULOG was 
established under the Presidential 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 BULOG by Government Regulation (PP) No. 7/2003, as amended by Government Regulation 
No. 61/2003.    G/STR/N/13/IDN • G/STR/N/14/IDN • G/STR/N/15/IDN 
 
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  3  DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE 
3.1  Summary statement providing overview  of operations of the state trading 
enterprise 
 Ensuring domestic rice price stabilization; 
 Carrying out domestic paddy/rice procurement at the Government Purchase Price; 
 Distributing rice to poor and vulnerable people , internally-displaced persons (IDP's), as well 
as victims of natural disasters and social conflicts; 
 Retaining and managing public reserve for food security purposes; 
 Importing for the purpose of price stabilization to fulfil the food security objective.   
 3.2  Specification of exclusive or special righ ts or privileges enjoyed by the state trading 
enterprise 
 Undertake the government mandate to import/exp ort and distribute rice, as well as maintain 
the national public reserve, for price stabilization programme and food security purposes;   
 
 In conducting its operation, Perum BULOG's sour ce of funding comes from the state budget.  
 
3.3  Type of entities other than the state tr ading enterprise that are allowed to engage 
in importation/exportation an d condition for participation 
Private sectors as well as Perum BULOG are given equal rights to import and export food 
commodities, subject to regulations or guidelines set by the government.  
 
3.4  How import/export levels are estab lished by the state trading enterprise 
The general rule for the import and export of rice is that such activities are very much determined 
by various factors, among others: domestic 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 projecte d 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 levels for both seller and buyer, export can then be carried out.    3.5  How export prices are determined 
Perum BULOG has yet to export rice and export price is not determined. 
3.6  How the resale prices of im ported products are determined 
The resale prices of imported products are determined by considering the level of domestic rice 
price in order to avoid market disruption. 
 3.7  Whether long-term contracts are nego tiated 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 government, such as G to G basis, 
counter trade, food aid, etc. 
 3.8  Brief description of market structure 
Ever since the liberalization of rice trade, th e Government of Indonesia has encouraged private 
sectors and cooperatives to participate in the domestic rice market. 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 prop erly, especially at times when prices tend to be 
unstable at producer or consumer level, Perum BULOG intervenes in the market and smooths out price fluctuations.   G/STR/N/13/IDN • G/STR/N/14/IDN • G/STR/N/15/IDN 
 
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  4  STATISTICAL INFORMATION (SEE ATTACHED TABLES I-III) 
See attached Tables I, II and III.  
 5  REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE (AS APPROPRIATE) 
- 
 6  ADDITIONAL INFORMATION (AS APPROPRIATE)  
  G/STR/N/13/IDN • G/STR/N/14/IDN • G/STR/N/15/IDN 
 
- 4 - TABLE I 
STATE TRADING: BULOG 
STATISTICAL INFORMATION, IMPORTS 
Year Description of 
product(s) 
(including HS 
number (s)) Total Quantity  
Imported 
(MT) a Quantity imported by 
state trading 
enterprise 
(MT) c Average 
Import 
price 1,b 
(US $/MT) Average representative  
domestic sales price 2,c 
(US $/MT) Mark 
Up National 
Production 3,a 
(MT) 
1 2 3 4 5 6 7 8 
2008 
 Rice (HS 1006)  289,689 None None 486   34,313,386  
2009 250,473 None None 474   36,363,477  
2010 687,582 527,772 500  616   37,532,608  
2011 2,750,620 2,550,623 547 701   37,130,293  
2012 1,927,330 1,336,907 636 753   38,993,232  
2013 472,665 None  557 692   40,015,518  
Average 1,063,060  735,884  560 620    37,391,419  
 
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% for seed, animal feed, loss.  
 
Sources:   
a. BPS (Central Bureau of Statistics). 
b.  USDA Grain Report. c.  BULOG. 
  
  G/STR/N/13/IDN • G/STR/N/14/IDN • G/STR/N/15/IDN 
 
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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 a 
(US $/MT) Average 
representative 
domestic sales 
price 1,b 
(US $/MT) Average 
export 
price 
(US $/MT) National 
Production 2,c 
(MT) 
1 2 3 4 5 6 7 8 
2008 
 Rice (HS 1006)  None None 431 486 None 38,125,985  
2009 None None 442 474 None 40,403,864  
2010 None None 557 616 None 41,702,898  
2011 None None 578 701 None 41,245,870  
2012 None None 703 753 None 38,993,232  
2013 None None 631 692 None 40,015,518  
Average None None 557 620  None 40,081,228  
 
Notes: 
      
  
1. Price of rice (quality IR III) at PIC (Cipinang Wholesale Market, Jakarta). 
2. Total production less 10% for seed, animal feed, loss.  
Sources:  
 
a.  Ministry of Agriculture. b. BULOG. 
c. BPS (Central Bureau of Statistics). 
  
  G/STR/N/13/IDN • G/STR/N/14/IDN • G/STR/N/15/IDN 
 
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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) a National 
Production 1,b 
(MT) Domestic sales by 
state trading 
enterprise 
(MT) a National 
Consumption 
(MT) c 
1 2 3 4 5 6 
2008 
Rice (HS 1006)  3,211,257 34,313,386 3,457,668 31,799,235  
2009 3,625,522 36,363,477 3,384,615 32,195,056  
2010 1,896,252 37,532,608 3,320,742 33,055,968  
2011 1,742,480 37,130,293 3,777,966 33,045,274  
2012 3,645,054 38,993,232 3,719,819 34,060,552  
2013 3,511,372 40,015,518 3,630,616 34,568,054  
Average 2,938,656  37,391,419 3,548,571  33,120,690  
 
Note:  
 
1. Total production less 10% for seed, animal feed, loss, etc. 
 Sources:  
a. BULOG. 
b. BPS (Central Bureau of Statistics). c. Ministry of Agriculture. 
 
 
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