WORLD TRADE  
ORGANIZATION  G/STR/N/11/IDN 
G/STR/N/12/IDN 9 February 2009 
 
(09-0613) 
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 19 January 2 009, is being circulated at the request of the 
Delegation of Indonesia.    
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 I. ENUMERATION OF STATE TRADING ENTERPRISE 
A. I
DENTIFICATION OF STATE TRADING ENTERPRISE  
 Perum BULOG, as State Trading Enterprise.   
 B. D
ESCRIPTION OF PRODUCTS AFFECTED (INCLUDING TARIFF ITEM NUMBER (S) ENCOMPASS IN 
PRODUCT DESCRIPTION ) 
 Rice (HS 10 06).   
 
II. REASON AND PURPOSE 
A. REASON OR PURPOSE FOR ESTABLISHING AND /OR MAINTAINING STATE TRADING ENTERPRISE  
• The purpose of establishing Perum BULOG as a St ate Trading Enterprise (STE), is to support 
domestic rice producers, to stabilize the price of  rice at consumer and producer levels, and to 
enhance food security;   
 
• In implementing its statutory functions, the agency engages in domestic procurement, 
sales/distribution, import/export and public stockholding.   
 B. S
UMMARY OF LEGAL BASIS FOR GRANTING THE RELEVANT EXCLUSIVE OR SPECIAL RIGHTS OR 
PRIVILEGES , INCLUDING LEGAL PROVISIONS AND SUMMARY OF STATUTORY OR 
CONSTITUTIONAL POWERS  
 Perum BULOG is governed by recent St ate owned Enterprise Law No. 19/2003, the 
provisions of Food Law No. 7/1996, and by Pr esidential Instruction No. 3/2007.  BULOG was 
established under the Presidential Decree No. 114/U/Kep/5/1967, and, since 2003, BULOG was G/STR/N/11/IDN 
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  transformed from a non-departmental government agen cy into a state-owned enterprise namely Perum 
BULOG by Government Regulation (PP) No. 7/2003, as amended by Government Regulation 
No. 61/2003.    III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE 
A. S
UMMARY STATEMENT PROVIDING  OVERVIEW OF OPERATIONS OF THE STATE TRADING 
ENTERPRISE  
• Managing imports for price stabilization and food security purposes;   
• Carrying out domestic paddy/rice procurement with the Government Purchase Price;   
• Distributing rice for poor and vulnerable people, IDP's, and victims of natural calamities and 
social conflicts;   
• Retaining and managing public reserve stock;   
• Ensuring domestic rice price stabilization.   
 B. S
PECIFICATION OF EXCLUSIVE OR SPECIAL RI GHTS OR PRIVILEGES ENJOYED BY THE STATE 
TRADING ENTERPRISE  
• Undertake the government mandate to import/expor t distribute rice, maintain national public 
reserve stock for the price stabilization programme and food security purposes;   
 
• In conducting its operation, Perum BULOG's s ource of funding comes from the state budget 
and dominantly from commercial credit guaranteed by the government.   
 
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 Perum 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:  level of 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 suppl y based on projected production, import of rice is 
necessary.  On the other hand, if ample supply is av ailable due to good harvest and the price of rice 
reaches acceptable level for both seller and buy er, export can then be carried out.   
 E. H
OW EXPORT PRICES ARE DETERMINED  
 Under the national regulations, the prices ca n be based on agreed types of transactions 
between both parties by considering many fact ors through tendering and/or others.   
 F. H
OW THE RESALE PRICES OF IMPO RTED PRODUCTS ARE DETERMINED  
 The resale prices of imported product are dete rmined by considering the level of domestic 
rice price in order to avoid market disruption.   
 
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  G. WHETHER LONG -TERM CONTRACTS ARE NEGOTIATED BY  THE STATE TRADING ENTERPRISE .  
WHETHER THE STATE TRADING ENTERPRISE IS US ED TO FULFIL CONTRACTUAL OBLIGATIONS 
ENTERED INTO BY THE GOVERNMENT  
 Perum BULOG as an implementing government agency negotiates long-term contracts or 
carries-out transactions to fulfil contractual ob ligations entered into by the government, and 
implement the bilateral long-term contracts on G to  G basis, counter trade, food aid, etc.   
 H. B
RIEF DESCRIPTION OF MARKET STRUCTURE  
 Since the government maintains the relatively li beral rice trade, there are a number of entities 
involved in the rice business, including marketing and processing.  The Government has also 
encouraged private sectors and cooperatives in local  markets to be more competitive.  When the 
market does not work well, especially when price instabilization happens in producer or consumer 
level, Perum BULOG intervenes in the market and smoothes out the price fluctuations.    IV. STATISTICAL INFORMATION (SEE ATTACHED TABLES I-III) 
 See attached Tables I, II and III.   
 
V. REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE (AS APPROPRIATE) 
 - 
 VI. ADDITIONAL INFORMATION (AS APPROPRIATE) 
  
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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 
price 1) 
(US $/MT) Average 
representative 
domestic sales price 2) 
(US $/MT) Mark 
Up National 
Production 3) 
(MT) 
1 2 3 4 5 6 7 8 
2004 633,756 29,350 245 262  30,911,559 
2005 446,679 68,800 285 290  30,947,352 
2006 666,220 291,872 297 421  31,120,996 
2007 Rice 
(HS 1006) 
1,705,651 1,293,980 326 480  32,605,035 
Average  863,077 421,001 289 363   31,396,236 
Notes:        
1) Rice price FOB at Bangkok for 25% broken plus insurance & transportation cost (US$ 20/MT).     
2)  Price of rice  (quality IR III) at PIC (Cipinang Wholesale Market, Jakarta).    Note  
3) Total production less 10% for seed, animal feed, loss.     
Sources:       2002          
51,489,694  
a) Bulog for domestic sales price at wholesale PIC (Cipin ang Wholesale Market, Jakarta);  and import by STE.    
b) CBS (Central Bureau of Statistics) fo r national production and rice import.   
 
  
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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 
(US $/MT) Average 
representative 
domestic sales 
price 1) 
(US $/MT) Average 
export 
price 
(US $/MT) National 
Production 2) 
(MT) 
1 2 3 4 5 6 7 8 
2004 None None 312 262 None 30,911,559 
2005 None None 287 290 None 30,947,352 
2006 None None 387 421 None 31,120,996 
2007 Rice 
(HS 1006) 
None None 438 480 None 32,605,035 
Average  None None 356 363 None 31,396,236 
Notes:        
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:   CBS (Central Bureau of Statistics) for national production.        
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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) National 
Production 1) 
(MT) Domestic sales by 
state trading enterprise 
(MT) National 
Consumption 
(MT) 
1 2 3 4 5 6 
2004 2,096,609 30,911,559 2,348,536 30,272,144 
2005 1,529,718 30,947,352 2,233,843 31,269,343 
2006 1,434,127 31,120,996 1,847,437 31,100,343 
2007 Rice 
(HS 1006) 
1,765,987 32,605,035 2,272,707 31,456,941 
Average  1,706,610 31,396,236 2,175,631 31,024,693 
Note:       
1) Total production less 10% for seed, animal feed, loss, etc.    
Sources:     
1) Bulog for domestic purchases and domestic sales.      
2) CBS (Central Bureau of Statistics) for national production.      
3) Ministry of Agriculture for national consumption.      
  
 
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