El Nino hammers RI, doubts up over imports
El Nino hammers RI, doubts up over imports
SINGAPORE (Reuter): A searing drought stemming from the El
Nino weather anomaly is hammering the key Indonesian corn crop on
Java and corn farms in the southern Philippines are reeling from
the dry spell, dealers said yesterday.
The drought, coupled with the currency crisis afflicting the
two nations, have fostered doubts about the ability of their
livestock and poultry firms to maintain the current level of
animal feed imports into next year, analysts and traders said.
"Indonesia is bad. The corn crop (on Java) is gone," said a
dealer for a commodity house in Singapore said. Jakarta would
have to import at least 300,000 tonnes of corn in the last
quarter to make up the shortfall, he added.
Indonesia normally harvests around 200,000-400,000 tons of
corn from Java. Agriculture Minister Syarifuddin Baharsyah said
on Wednesday he saw no early respite from the drought and parched
farms would get some rain only in November.
In that El Nino, floods and drought in more than 15 countries
killed almost 2,000 people and caused at least US$13 billion in
damage.
"What is the impact of all these economic problems on this
region?" asked one analyst. "Do they have the money to continue
their imports."
"The bigger Indonesian companies will be able to continue
their import programs. But I know some of the smaller to medium
ones may suffer as they try to juggle their resources for
imports," a U.S. trader said.
Another dealer said the Philippines was in the same fix and
that only major food outfits like San Miguel, one of the biggest
companies in the country, may have the money to ride out the
problems.
Budiarto Soebijanto, chairman of the Federation of Feedmill
Operators in Indonesia, said corn imports were likely to touch
one million tonnes in 1997 from 800,000-900,000 tonnes last year.
The Philippines is expected to import up to a million tonnes
of corn, mainly for animal feed.
Traders said surging consumption of chicken and other meat in
both nations will have to be met somehow by feed imports.
"They won't stop consuming things like chicken rice. So are
they going to switch to lower cost feed?" one analyst asked.
More immediately, the Southeast Asian grains and oilseeds
market was flat with traders saying buyers were very cautious
about doing any deals due to the currency gyrations here.
The only thing heard in the market was the report that
Malaysia bought about 30,000 tonnes of Chinese corn for January
shipment, a dealer said. "I heard they've done the deal."
The Malaysian buyer reportedly got a discount from the current
price of Chinese corn, which was quoted by the trade at around
US$136-$138 a tonne C&F.
Thailand has ample supplies of corn and will not go into the
market after the government approved duty-free imports of 150,000
tonnes of corn, traders said.
Soybean and soymeal buyers around the region sat back even
though Indonesia and Malaysia have not covered their needs for
the last quarter of the year.
Traders estimate Indonesia will need to buy around 50,000 to
70,000 tons of meal while Malaysia would have to pick up about
30,000-40,000 tons.
"In the last quarter, Malaysia and Indonesia are completely
open," a dealer said, adding though that they will not be in a
hurry to pick up material since they expect prices to head south
due to a bumper U.S. and Indian soybean crop.