Indonesia may turn to Europe to import milk
Indonesia may turn to Europe to import milk
JAKARTA (JP): Indonesia may soon turn to European countries to
buy dairy milk as the prices offered by the country's current
foreign sellers are no longer affordable, the Indonesian
Association of Food and Beverages Producers has said.
The association's chairman, Thomas Dharmawan, said Friday that
Indonesia, which at present buys milk from Australia, New Zealand
and the United States, was looking for new sellers in Yugoslavia,
Poland, the Netherlands, France and Switzerland.
He said that European milk prices were cheaper than those
being offered by Indonesia's traditional sellers.
"The price of dairy milk from European countries ranges
between US$700 and $1,000 per ton, (which is) much cheaper than
the approximately $1,700 per ton from New Zealand," he told
Bisnis Indonesia daily.
He said the plan should lower the prices here of imported
fresh milk, a raw material for locally produced processed milk.
The 70 percent fall in the rupiah's value against the U.S.
dollar to an average of 10,000 over the past three months from
about 2,450 before the monetary crisis hit Indonesia in July has
caused most imported goods, including milk products, to increase
in price by about 300 percent.
According to data from the Ministry of Agriculture,
Indonesia's production of fresh milk totaled around 400,000 tons
last year, of which 350,000 tons were sold to local processing
industries, and the remaining 50,000 tons retailed.
Local demand for dairy milk exceeded 1.1 million tons last
year. Around 70 percent of this, or around 770,000 tons, was
imported.
Director General of Agricultural and Forestry Products
Industries Sujata said the Indonesian government would seek help
from the Australian and New Zealand governments to negotiate
lower milk prices with the two countries' exporters.
He feared that if prices of milk from those countries remained
high, Indonesian importers would not be able afford to buy them
for much longer.
Should Indonesian exporters cut their milk imports, the lower
demand would certainly hurt the milk producers in those two
countries, he said.
"It will be better for them to reduce their milk prices for
Indonesian importers because maintaining the current prices would
mean an oversupply in the two countries," he said.
He said subsidizing milk imports was not one of the
government's main priorities.
Thomas said that if the government agreed to provide a
subsidy, it should be given to PT Pantja Niaga, a state trading
company appointed as the sole importer and distributor of the
milk before the government scrapped its monopoly on Jan. 21 as
part of the concessions for the International Monetary Fund-
brokered US$43 billion rescue package.
Thomas said the subsidy would help small milk processing
industries buy imported milk at a reasonable price from Pantja
Niaga. (gis/das)