Indonesia sees sharp growth in feed production

Indonesia sees sharp growth in feed production

SINGAPORE (Reuters): Indonesian feedmillers, buoyed by stronger than anticipated growth in demand last year, are hoping commercial feed output will bounce back to pre-economic crisis levels in 2002, a senior trade official said on Tuesday.

"If the political climate remains conducive, I would expect the country's commercial feed production to reach 6.5 million metric tons in 2002," said Budiarto Subijanto, chairman of the Indonesian Feedmillers Association.

He said in a telephone interview from Jakarta that Indonesia's feed production was close to five million tons in 2000, much higher than the anticipated 4.5 million tons.

"Looking at the current trend, we are hoping that commercial feed production in Indonesia will rise to about six million tons in 2001," Subijanto said.

Indonesia's feed output dropped to 3.7 million tons in 1999 from as high as 6.5 million before the start of the regional economic crisis in mid-1997. But since the beginning of 2000, the domestic feed industry is witnessing signs of revival.

Indonesia's feed sector was badly hit by the economic crisis when many producers in Indonesia, which had an annual feed production capacity of 9.5 million tons, closed operations after per capita broiler consumption fell as low as 2.58 kilos in 1998 from 4.1 kilos the previous year.

Subijanto said the domestic poultry industry's recovery would have been faster if the political climate was relatively more stable.

"Poultry farms in remote areas are afraid of expanding their business because of very obvious reasons," he said.

Poultry feed in Indonesia, with a population of 210 million people, accounts for the bulk of the country's feed production. Imported feed ingredients constitute 50 to 60 percent of the formulation of animal feed.

Subijanto said some local firms in Indonesia, where most of the poultry is locally consumed, were also making efforts to export some of their produce in order to boost demand.

"I know some companies are making efforts to export poultry to Japan," he said. "But I am not sure how many of them have been so far successful."

Subijanto said growing demand for feed from the poultry sector was expected to boost Indonesia's soymeal imports to about 1.2 million tons in 2001 from about one million in 2000.

"Some soymeal import contracts will be finalized soon," he said. "Importers are comparing the various available options as South American soymeal availability is going to increase in the coming months."

Indonesia buys the bulk of its meal requirements from India due to relatively shorter shipment period and availability of smaller cargoes compared to the United States and South America.

"Small and medium-sized feedmillers will continue to buy from India because of the advantage in financing small-sized cargoes," Subijanto said.

According to U.S grain trade sources, out of the one million tons of soymeal imported by Indonesia in 2000, India accounted for about 470,000 tons, the United States sold 300,000 tons, Brazil shipped about 155,000 tons and the remainder came from Argentina.

"As far as corn is concerned, I don't see the need for imports until April," Budiarto said. "Right now, the domestic harvest pressure is there."

He said corn imports were expected to remain flat in 2001 because of a good domestic crop.

Indonesia imported about 950,000 tons of corn in 2000.