Indonesia's grains move sends positive signal<\/p>\n
SINGAPORE (Reuters): Strife-torn Indonesia's move to lift a
\nthree-and-half-month ban on South American grains could not have
\ncome at a better time.<\/p>\n
The rupiah is strengthening, the feed market is facing a
\nsupply squeeze, South American grains are currently the cheapest
\noption available and importers have started dipping their toes in
\nthe market after a long lull.<\/p>\n
Asia's grains trade sees it as one of the first market-
\nfriendly moves by Indonesia under new President Megawati
\nSukarnoputri as businesses hope for a return of political and
\neconomic stability following last week's political transition.<\/p>\n
\"The move certainly signals that things are moving for the
\nbetter. It is a sign for business to hope for more market-
\nfriendly policy decisions in the future,\" said Bob Rusli Tjetjep,
\ngeneral manager of PT Panganmas Inti Persada, a Jakarta-based
\ncommodity firm.<\/p>\n
The Asian grains trade was stunned when Indonesia banned South
\nAmerican grain in mid-April due to foot-and-mouth fears -- at a
\ntime when the South American harvest was at its peak -- robbing
\nIndonesian buyers of the chance to buy the cheapest option
\navailable.<\/p>\n
Indonesian buyers were obliged to fill most of their needs
\nwith purchases from the United States at prices up to $20 a ton
\nhigher than Argentine or Brazilian supplies.<\/p>\n
\"When all other Asian countries were buying -- and only buying
\nSouth American corn and soymeal -- there was no reason for
\nIndonesia to ban them in the first place,\" said one Singapore-
\nbased trader.<\/p>\n
\"South American supplies are still the cheapest and some
\nIndonesian buyers, who lost the opportunity earlier, can cover a
\npart of their needs quickly,\" the trader added.<\/p>\n
Indonesia's Agriculture Ministry said on Tuesday it had
\ndecided to lift the ban because of the reduced threat of the
\nfoot-and-mouth disease. But the government will make regular
\nreviews of the situation and reimpose the ban if fresh cases of
\nthe outbreak are reported.<\/p>\n
Indonesia was declared free of foot-and-mouth in 1990.<\/p>\n
Since last week's ouster of the country's first democratically
\nelected president, Abdurrahman Wahid, the rupiah has gained more
\nthan 18 percent against the U.S. dollar.<\/p>\n
\"With the rupiah gaining ground sharply, the decision to lift
\nthe ban is definitely icing on the cake,\" said one Jakarta-based
\ngrains trader. \"We are hoping that we will be able to partially
\noffset the damage to our trade in the past months.\"<\/p>\n
At the start of the year, Indonesia was hoping its feed output
\nwould rise to about 5.10 million tons in 2001 from 4.60 million
\nlast year, but the slowdown in recent months prompted trade
\nofficials to revise down the figure to zero growth.<\/p>\n
\"A supply squeeze situation for feed ingredients partly
\ncontributed to the slowdown in Indonesia's commercial feed
\nproduction in the past months,\" said another Singapore-based
\ngrains and oilseeds trader.<\/p>\n
\"But now with supplies expected to rise -- and at a cheaper
\nprice from South America -- there is hope for some growth,\" the
\ntrader added.<\/p>\n
Although some Asian grain traders remain hesitant over South
\nAmerican grain contracts, many of them expected business to flow
\nin as the market was still not covered for all of September.<\/p>\n
\"After looking at the government's statement that it could
\nreimpose the ban, some traders are shying away from fresh deals,\"
\nsaid one trader. \"They don't want to again face the trauma of
\ndiverting and re-diverting cargoes.\"<\/p>\n
Many South American cargoes, which were stranded at sea after
\nJakarta suddenly banned South American grains, were diverted to
\nother destinations such as Malaysia, Thailand and Taiwan at
\ndiscounted prices.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesias-grains-move-sends-positive-signal-1447893297",
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