Unsold imported corn to be exported<\/p>\n
By Sylvia Gratia M. Nirang<\/p>\n
JAKARTA (JP): Feedmeal producers are reselling their stocks of
\nimported corn overseas due to sluggish demand here as
\nbankruptcies batter the country's poultry farmers.<\/p>\n
Ismail, the manager of the trading department of major
\nfeedmeal producer JAPFA Comfeed, said yesterday that exports were
\nexpected to continue throughout the year as feedmeal producers
\ntried to get rid of their unsold stock.<\/p>\n
\"Feedmillers are not looking for the profits. They just want
\nto export because it takes a lot of money to keep corn in the
\nstorehouses. They are even exporting imported corn just to keep
\ntheir cash flow moving in facing sharp falls in feedmeal demand,\"
\nIsmail told The Jakarta Post.<\/p>\n
He said prime areas for growing corn domestically, including
\nLampung, East and Central Java and South Sulawesi, would harvest
\nthe crop this month and April.<\/p>\n
\"We have a commitment to buy local corn, but we have limited
\nconsumption. To fulfill our commitment, we plan to sell our old
\nstock of imported corns,\" Ismail said.<\/p>\n
He said a bumper harvest exceeding local demands was expected
\nthis year.<\/p>\n
Foreign buyers from Malaysia and Thailand, he added, were
\nlooking forward to buying Indonesian corn -- both the local
\nproduction and the ex-imports -- due to its much lower price
\ncompared to corn from the United States.<\/p>\n
A Malaysian corn importer was quoted by Reuters last week as
\nsaying the quantity of Indonesian corn arriving in Malaysian
\nports was not big but it was fetching much lower prices.<\/p>\n
Indonesia's Association of Feedmeal Producers said early this
\nyear that the country's feedmeal production was expected to
\nplunge by over 55 percent this year, to 2.5 million tons from 5.5
\nmillion tons in 1997. It cited rising prices, which have forced
\n80 percent of poultry farmers out of business, as the reason.<\/p>\n
Data from the Ministry of Agriculture shows the country
\nimports at least one million tons of corn on average a year, but
\nlast year the amount increased by 30 percent to 1.3 million tons,
\ndue to the prolonged dry season which destroyed the country's own
\nharvest.<\/p>\n
Imports came from the United States, Argentina and China.<\/p>\n
The nation produced 9.18 million tons last year, a slight
\ndecrease by 1.34 percent from 9.31 million tons in 1996. Local
\ndemand for corn is more than 10 million tons per year. Around 40
\npercent of this is consumed by the feedmeal sector, but its
\nconsumption this year is expected to fall drastically to around
\n1.5 million tons.<\/p>\n
Corn makes up about 50 percent of the fodder. Other
\ningredients are fish powder, premix concentrate, rice shiftings
\nand soybean pellets.<\/p>\n
The country's currency crisis, which has slashed the rupiah's
\nvalue against the U.S dollar by about 75 percent since early
\nJuly, has more than doubled the price of feedmeal, which mainly
\ncontains imported materials.<\/p>\n
Skyrocketing prices have threatened most of the country's
\nfarmers and forced at least 80 percent of the country's 17,600
\npoultry farmers to stop operation.<\/p>\n
A manager of a major feedmeal producer who asked for anonymity
\nsaid that at least 25,000 tons of corn was exported in February,
\nwhile another 40,000 tons would be shipped in the middle of
\nMarch.<\/p>\n
\"Imports have stopped. Who wants to do it anyway when demand
\nfor feedmeal has dropped sharply. Besides, we can't afford
\nimported corn anymore.\"<\/p>\n
He said local feedmillers formerly preferred to use imported
\ncorn due to the high water content in local harvested corn, which
\nmade it more difficult for processing.<\/p>\n
Outgoing Minister of Agriculture Sjarifudin Baharsjah
\nannounced last week that the government set the corn floor price
\nat Rp 550 per kilogram to protect farmers from the sharp drop in
\nthe prices caused by the excessive local supply.<\/p>\n
He said the country's feedmeal industry was expected to fail
\nto absorb the local harvest this year due to the falling demand.<\/p>\n
The corn harvest in East and Central Java, he added, was
\nexpected to reach two million tons this month, while the
\ncountry's corn \"barn\" of Lampung was expected to harvest over
\n600,000 tons this month.<\/p>\n
Antara news agency reported last week that the price of
\nLampung corn at the farmers level dropped drastically by over 80
\npercent to Rp 350 per kilogram this month, from Rp 1,500 per
\nkilogram in January.<\/p>\n
Farmers fear the prices will plunge further come harvest time.<\/p>\n
Some 217 hectares of corn fields throughout the province are
\nexpected to yield more than 804,000 tons of corn.<\/p>\n
The head of the Ministry of Agriculture's Food Crop and
\nHorticulture provincial office in Lampung, Soebagiono, said that
\na boom in the corn yield this year was expected after the poor
\nharvest last year.<\/p>\n
\"But the boom in the harvest will also have a negative effect
\nfor corn farmers, since the price of corn may drop below Rp 250.
\nIf this happens, corn farmers will suffer great losses.\"<\/p>\n
He acknowledged there were rumors among local corn traders and
\nfarmers that the low price of their product was due to reluctance
\namong feedmillers to store corn on a large scale.<\/p>\n
\"Feedmillers storehouses are still full of their old stocks.
\nThey do not want to buy corn anymore. That's why the price has
\ndropped significantly,\" Sutrimo, a corn trader in Lampung, told
\nthe news agency.<\/p>\n
The chairman of the Association of Feedmeal Producers,
\nBoediarto Soebianto, has urged the government to find other
\nmarket access for local harvested corn due to the falling
\nconsumption power of the country's feedmeal industry.<\/p>\n
He said this year's harvest could reach nine million tons,
\ntranslating into an excess supply of about two million tons.<\/p>\n
\"The feedmeal industry consumed at least 3.5 million tons in
\nthe past years. This year, it will consume around 1.5 million
\ntons, making an excess supply of about two million tons.\"<\/p>\n
Although he considered the export market a way to off-load the
\nexcess supply, he cautioned that the quality of exports would
\nhave to be good to attract foreign buyers.<\/p>",
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