"We don't know the size of the second crop yet. But if we survey Java, the planting looks excellent and there are a lot of rains," said one trader in Jakarta.

"The crops tend to be a big one...and maybe Indonesia doesn't need too much additional rice."

The densely-populated island of Java is Indonesia's rice bowl.

Indonesia has said it would import 3.1 million tonnes of staple rice in 1998 to help feed the country's population of 200 million who are struggling with rising prices of essentials because of the currency crisis.

The rupiah has lost more than 80 per cent of its value against the US dollar since last July. It was quoted at 14,600/14,800 at 0635 GMT.

Traders said the imports would take place during the fiscal year (April/March), but the country hadpreviously secured imports of between 1.6-1.7 million tonnes of rice, which meant the total imported stocks will reach nearly five million tonnes.

But traders said a possible problem was if the state commodity regulator, Bulog, which imports rice and other essentials, failed to obtain the 1.1 million tonnes of rice it had already agreed with major companies because of problems in opening letters of credit.

Indonesia's Financial crisis means many foreign firms are unwilling to accept letters of credit backed by domestic banks.

"If Bulog does not get the 1.1 million tonnes of rice, it has to go back to the market and repurchase some rice. But frankly, I don't think Indonesia is in desperate need of more rice at the moment," said the trader.

Traders said rice hovered at 1,600 rupiah/kg and distribution was reported to be smooth because of the stable rice prices. Agriculture Minister Soleh Solahuddin has said the country's unhusked production is estimated to fall 6.25 per cent to 46.3 million tonnes in1998 against 1997 production because of last year's drought induced by the El Nino weather phenomenon.

The August harvest accounts for a third of total output.

The United Nations Food and Agriculture Organisation (FAO) said last week Indonesia's food situation had worsened in recent months and it was likely the key August harvest of rice would fall below target.

Traders said Indonesia's wheat imports were at a standstill because Bulog could not provide subsidies during the currency crisis and private companies simply did not have cash.

"This has caused prices of noodles to rise. Millers do not have money to import...but they are talking to major trading companies basically to explore the possibility of how they can bring in their wheat by themselves, but no success so far," said one trader.

Indonesia imports wheat from Australia and the United States.

Traders said corn prices were mostly stable at 1,350rupiah/kg and exports had slowed considerably because of the low demand.

At fob prices of$92/tonne, Indonesia's corn is the cheapest in the world."Demand is very slow. Thailand has a local crop and Malaysia is comfortable with its stocks. I can say exports have almost come to a standstill," said one trader.

Traders said prices of soyameal rose to 3,600 rupiah/kg because certain feedmillers, given a subsidy to import soyameal at the exchange rate of 6,000 rupiah against the US dollar, had made a profit by selling the products at market prices."The feedmeal does not come down and the poultry industry is still dying. This means the subsidy has not been disbursed in a correct manner," said one trader.