Indonesia Moves Bulog Rice into Retail as Premium Packs Become Scarce

Bulog supplies directed to retail networks

Indonesia is increasing the flow of rice from state food logistics agency Perum Bulog into modern retail channels after five-kilogram premium rice packs became difficult to find in several areas. Trade Minister Budi Santoso said on September 2 that Bulog's premium rice, sold under the Befood name, had started entering retail outlets. Bulog's medium-grade rice is also being prepared for distribution through modern retailers.

According to detikFinance, the Trade Ministry is coordinating with the Indonesian Retailers Association, Aprindo, and the Indonesian Shopping Center Retailers and Tenants Association, Hippindo. The aim is to supply Bulog products through minimarkets and other modern retail outlets. The shortage has been reported in Palembang, South Sumatra, and Malang, East Java, highlighting pressure in both traditional markets and organized retail.

Five-kilogram packs disappear as prices rise

At Palembang's 10 Ulu traditional market, several premium brands in five-kilogram packs have become difficult to obtain. Traders are instead selling more 20-kilogram bags and loose rice by the kilogram. A local trader told detikFinance that the smaller packs had been scarce for almost two months, attributing the problem to unfavorable pricing and higher plastic costs that prompted producers to stop making the format.

Stocks are also thin in modern retail. At a SuperIndo outlet in Palembang's Sukarami area, customers were limited to one pack per day because of restricted availability. The South Sumatra provincial government, the regional inflation control team and provincial police are examining the cause of declining premium rice stocks in Palembang's retail networks.

Malang prices reach Rp80,000 per pack

In Malang, premium rice prices at several traditional markets have climbed to Rp80,000 for a five-kilogram pack. A trader at Bunulrejo Market said wholesale purchase prices had previously ranged from Rp76,500 to Rp77,000 per five kilograms. The increase developed gradually over the past month while supplies from distributors continued to tighten, according to detikFinance.

The local disruption coincides with broader inflation concerns. ANTARA reported that national retail rice prices on September 2 ranged from Rp14,750 to Rp17,700 per kilogram, based on Bank Indonesia's Strategic Food Price Information Center. Indonesia recorded monthly inflation of 0.21% and annual inflation of 3.19% in August 2026. Food, beverages and tobacco prices increased 3.86% year on year and contributed 1.13 percentage points to overall inflation.

Market operations proposed before El Niño

CORE Indonesia economist Dipo Satria Ramli told ANTARA that Bulog market operations should be a short-term government priority to stabilize rice and other staple foods. Volatile food inflation reached 0.88% month on month in August after a 1.68% decline in July, while the annual rate was 4.06%. Indonesia's 2026 inflation target is 2.5%, with a tolerance of one percentage point in either direction.

Supply risks could persist as the meteorological agency BMKG expects El Niño to last at least until the beginning of the first quarter of 2027. In September 2026, 169 seasonal zones, representing 25.41% of Indonesia's land area, are projected to reach peak dry season. The government is already distributing SPHP stabilization rice, organizing low-cost food markets and providing rice assistance. Bulog was assigned to deliver 10 kilograms per month for three months to 33.24 million recipients during July–September 2026. These measures could add volume to the market, but restoring regular supplies of premium five-kilogram packs will also depend on packaging economics and the willingness of producers and distributors to serve that segment.