The government has taken steps to address growing concern over food security amid fast-rising prices. The La Niña weather pattern, which cools the Pacific Ocean, brought heavy rain to Indonesia throughout 2010, resulting in crop failures. According to a UN body, the World Meteorological Organisation, La Niña is expected to continue to influence global weather patterns until at least the end of the first quarter of 2011. Poor domestic harvests, as well as tightening international supply, have pushed up domestic prices for 12 staple commodities over the past year, according to the co-ordinating minister for people's welfare, Agung Laksono. Green chillies have experienced the sharpest price increase, rising by 314% year on year in January. The cheapest grade of rice had risen by 22.6%, to Rp7,500 (80 US cents) per kg, while premium rice grades had risen even more sharply. Rice purchases constitute the largest single item of expenditure in poor households' budgets, and a prolonged period of high prices would therefore erode rapidly recent gains in reducing poverty.

Concerns over poverty may explain the speed and scale with which the state procurement agency, Bulog, moved to replenish its stockpiles after the poor harvest in 2010. In late January the agency surprised markets with the purchase of 820,000 tonnes of Thai rice to be shipped to Indonesia in February and March, after initially tendering for only 170,000 tonnes. The order, which comprised 650,000 tonnes of 15% broken grade rice and 170,000 of 5% broken grade, commanded prices of between US$490 and US$545 per tonne, respectively.

During the 2008 food price crisis, when international rice prices rose to over US$1,000 per tonne, Indonesia benefited from a bumper rice harvest that kept domestic prices low. However, in 2011 the country will be exposed to rising international prices. A good crop in Vietnam, a major exporter, as well as reduced demand in the Philippines, which is consistently the world's largest rice importer, should prevent prices from reaching the highs of 2008. However, Bangladesh has recently tripled its forecast import requirements in 2011, and so Bulog's early procurement of stocks appears prudent.

The government has also temporarily suspended import duties on 57 food products, with effect from January 24th. Staple foodstuffs, including rice, wheat and soya beans, were all included in the exemptions, but duty will continue to be paid on imports of sugar. By early February wheat prices had risen by 82% year on year to US$862 per tonne, while soya bean prices had increased by 58% to US$1,438 per tonne. Indonesia imports all of its wheat, an essential ingredient in noodles, as well as 70% of its soya beans. Animal feed material and fertilisers are also exempt from import duties until the end of the year. Taxes on exports of palm oil have also been raised to 25%, up from 20%, with effect from February 1st, a measure intended to offset the rising cost of cooking oil in the domestic market.