Poultry feed producers have objected to government plans to cease corn imports next year, saying they are concerned that domestic output may not cover their need for the commodity.
Corn imports “cannot be stopped at all because we’re often running out of corn, mostly during the non-harvest season,” Askam Sudin, executive secretary of the Poultry Feed Producers Association, or GMPT, said on Friday.
About 50 percent of poultry feed consists of corn, making it the industry’s major raw material. Indonesia produces about eight million tons of poultry feed annually.
Based on government data, national output of dried corn kernels was estimated at 15.9 million tons for this year, while domestic demand was projected to be 13 million tons.
Askam said that the feed industry requires four million tons a year. Outside of the harvest season, however, producers have been hampered by a lack of stock. Indonesia imported 414,000 tons of corn for poultry feed last year, down from imports of 1.6 million tons in 2006.
Thomas Effendy, vice president of PT Charoen Pokphand Indonesia Tbk, said that good post-harvest management was needed before Indonesia could halt corn imports. He explained that corn had to be dried properly with machines after it was harvested, otherwise the quality of the stock would be poor.
At present, most corn farmers dry their crops in the traditional way: by laying it out under the sun.
“Good corn for feed contains 16 percent water at the most. Sun-dried corn has a high water content and cannot be stored for long periods of time,” Effendy said.
During harvest time, farmers must sell all their corn because it will spoil, requiring feed producers to import the commodity during the rest of the year.
Effendy said that if the government was planning to stop imports, it must provide corn drying machines to farmers to allow them to preserve their crop for feed producers.
The GMPT’s Askam said producers would not mind paying higher taxes on corn imports if the commodity was readily available, adding that a tax rate of 10 percent to 20 percent would even be acceptable “as long as we can get it, otherwise production could stop and bring us losses.”
Regarding producers that may import corn next year, Sutarto Alimoeso, director general of food crops, said that the government planned to raise import taxes for the commodity higher than the current 5 percent, but he did not give an exact figure. “We are still calculating the tax increase,” he said.
The government said on Thursday that corn imports would be halted next year because output was estimated to meet domestic demand. It forecast a dried corn output level of 18 million tons for 2009, up 13 percent from this year.