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.