State companies told to buy local corn

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)