Indonesia to boost rice stocks amid global food fears

Indonesia to boost rice stocks amid global food fears

By Neil Chatterjee

JAKARTA | Wed Feb 9, 2011 4:46pm EST

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JAKARTA (Reuters) - Indonesia ordered hefty rice imports on Wednesday to boost stocks by a third in the latest sign that governments concerned about rising food prices and dwindling supplies are rushing into the market and could drive inflation even higher.

Global food prices have climbed to record highs on shrinking supplies of wheat, corn, soybean and oilseeds. While rice has been less of a worry thanks to ample supplies in the top two exporters, Thailand and Vietnam, traders said other Asian governments may soon seek to boost rice stocks too.

Adding to gathering nervousness among governments over food supplies, China plans subsidies to boost grain output this year, state radio said in a report on its website.

"Maintaining a stable grain output increase has a very important meaning to managing inflation expectations, stabilizing general consumer prices, and realizing rapid and stable economic growth as well as social harmony and stability," the report said, citing a regular state council meeting held by Premier Wen Jiabao on Wednesday.

The impact of Cyclone Yasi in Australia has exacerbated food worries. The chairman of Australia's main sugar industry group Canegrowers said up to a quarter of the sugar cane crop in the state of Queensland may have been lost.

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