Indonesia's corn import ban to benefit U.S., Thai producers

Indonesia's corn import ban to benefit U.S., Thai producers

SINGAPORE (Dow Jones): U.S. corn producers are expected to
carve a bigger market share in Indonesia's corn market following
the country's ban on imports from Argentina and China, industry
participants said.

Even Thai corn producers, who are expected to export their
surplus corn this year, may get a slice of the pie as well, they
said.

Indonesia imports a high level of corn every year. The U.S.
Department of Agriculture, citing figures from the Indonesian
Central Bureau of Statistics, said Indonesia imported 908,000
metric tons of corn in the 1999-2000 marketing year, which ran
October through September.

Of the total, 700,000 tons came from China, 177,000 tons from
the U.S. and 31,000 tons from Argentina. "It (ban) will be
helpful in increasing the U.S. corn market share in Indonesia,"
said Kent Sisson, U.S. agricultural attache in Indonesia.

The Indonesian Agriculture Ministry banned imports of feed
grains from several European and South American countries April
20. It has also regulated the importation of Chinese corn,
allowing only the entry of processed Chinese corn.

The ban was to protect Indonesia's status of a foot-and-mouth
disease-free country.

Indonesia imports a massive amount of corn because its local
corn harvest can't meet the needs of the growing poultry sector.

The Indonesian Trade Ministry said the livestock industry
consumed 2.5 million tons of corn in 2000, half of which were
imported.

Achmad Dawami, vice-president of the Indonesian Poultry
Breeders Association, said the local poultry industry is expected
to produce 800 million heads of broiler chickens this year, up 23
percent from last year's 650 million heads.

"(Because of this ban), Indonesia either has to buy feed corn
from alternative sources or it has to import poultry meat," said
Walter Armbruster, chairman of the Singapore-based Pacific
Economic Cooperation Council.

Chicken meat is the most popular meat product in Indonesia.
Nasi ayam (fried rice with chicken meat) and ayam bakar (spicy
roast chicken) are part of Indonesians' typical diet.

Importing chicken meat, however, is out of the question, said
Dawami. Local poultry breeders can satisfy the domestic demand
for chicken meat, if they can get ample U.S. feed corn.

Jakarta-based traders and feed millers said they have dropped
Argentina from their list of sellers and are now switching to
U.S. corn.

They said that aside from its good quality, U.S. corn, which
is selling at around $115 a ton, C&F, Jakarta, is price-
competitive.

"Most feed mills are now starting to change their corn import
sources," said Budiarto Soebijanto, chairman of the Indonesian
Feed Mill Association.

"Indonesia has been a good customer of U.S. feed grains in the
past. This (ban) will allow Indonesia to purchase more U.S. feed
grains," said Cary Siffereth, director for South East Asia of the
U.S. Feed Grains Council.

The ban has also created a golden opportunity for Thai
producers.

Thailand isn't a regular corn exporter as its domestic
production is just enough to fill local requirements.

But according to Karoon Tantiponganant, deputy manager of
Nanapan Co., one of the major agricultural export firms in
Bangkok, Thailand will have a surplus this year thus allowing it
to sell corn to Indonesia.

Traders said Indonesia recently bought 75,000 tons of feed
corn from Thailand, and the shipment is due in the next two
months.