State companies told to buy local corn

JAKARTA (JP): The Ministry of Agriculture asks state agriculture companies to buy local harvested corn to stabilize prices, a senior official has said.

Secretary general Sjarifudin Karama said here on Monday that the ministry issued a directive dated Feb. 27 to state-owned plantations, fisheries, and feedmillers companies to buy local corns.

"The move aims to help prop up the decreasing prices of local corn and in the same time supply raw materials to local feedmillers," he said.

Sjarifudin said, the government had set corn floor price at Rp 550 (5.5 U.S. cents) per kilogram to protect farmers from sharp price fluctuations.

Corn prices have dropped drastically due to the abundant supply. For instance, corn prices in Lampung, the country's prime corn barn, plunged sharply by 80 percent to Rp 300 per kilogram last month from Rp 1,500 in January.

Sjarifudin said state enterprises could help stabilize prices by buying local corns and processing them into corn flour, an ingredient for the production of feedmeal, and then selling them to feedmeal producers.

The other raw materials for feedmeal are soybean flour and fish powder.

The chairman of the Association of Feedmeal Producers, Boediarto Soebianto, said separately that the country's feedmillers would not be able to absorb all local corn this year due to the falling demand of feedmeal.

Local feedmeal producers still have some 400,000 tons of corn in their storehouses as of this month which is expected to be enough to supply feedmillers for three months.

Boediarto estimated that there would be an excess supply of about 2 million tons of corn this year because feedmillers would only absorb about 1.4 million tons, far lower than 3.5 million tons they consumed last year. (gis)