High global corn prices will contribute to Indonesian imports
falling by about 35 percent to 2 million tonnes this year, an industry group
said on Tuesday. Global grain supplies have been depleted by a devastating
drought in the United States, the world's top exporter, with US corn futures
climbing about 50 percent since the start of June.
Indonesia overtook Malaysia to become Southeast Asia's largest corn importer last year with 3.1 million tonnes, Tony Kristianto, vice chairman at the Indonesian Corn Board said. Heavy rains followed by extreme heat in Indonesia, ruined the crop in the main growing areas last year, boosting import numbers.
"Higher prices," Kristianto told Reuters when asked about the reasons for the expected import dip, adding that there may be more plantings in the second half of this year. "Feed mills are importing at higher prices, so they try and get more local production and pay more."
Southeast Asia's largest economy gets about 60 percent of its corn imports from Argentina and the United States, with India an alternative supplier. Feed mill demand for corn accounts for about 70 percent Indonesian consumption of about 9 million tonnes per year, added Kristianto, whose group was established ten years ago.
Earlier this year, the Indonesian Feed Mill Association said corn imports would fall by 2 million tonnes to 1.5 million tonnes, due to a surge in domestic output. "The outlook is that the US corn price is going higher and we will then follow it," Kristianto said. In January, Indonesian feed mills paid around 2,500 rupiah ($0.26) per kg of corn, but this had now risen to almost 3,500 rupiah ($0.37) per kg, Bogor-based Kristianto added.
Rising prices will lead to an increase in slaughtered birds in the poultry industry, while more Indonesians are likely to switch to meat substitutes like tofu and tempe that are cheaper. Corn output in the archipelago will be between 8-9 million tonnes this year, little changed from last year, added Kristianto, a consultant with more than 25 years experience in the agriculture industry.
Indonesia's main corn crop is usually in the first quarter, with a mid-crop around September. "Not a big increase," he added. "We have a systemic problem in our country in food crops we have problems with land, policy, systems - the autonomous system in Indonesia ruins all efforts to grow agriculture. "Central government may have plans or programs but they cannot be executed because the bupati (district head) doesn't support it."
Indonesia overtook Malaysia to become Southeast Asia's largest corn importer last year with 3.1 million tonnes, Tony Kristianto, vice chairman at the Indonesian Corn Board said. Heavy rains followed by extreme heat in Indonesia, ruined the crop in the main growing areas last year, boosting import numbers.
"Higher prices," Kristianto told Reuters when asked about the reasons for the expected import dip, adding that there may be more plantings in the second half of this year. "Feed mills are importing at higher prices, so they try and get more local production and pay more."
Southeast Asia's largest economy gets about 60 percent of its corn imports from Argentina and the United States, with India an alternative supplier. Feed mill demand for corn accounts for about 70 percent Indonesian consumption of about 9 million tonnes per year, added Kristianto, whose group was established ten years ago.
Earlier this year, the Indonesian Feed Mill Association said corn imports would fall by 2 million tonnes to 1.5 million tonnes, due to a surge in domestic output. "The outlook is that the US corn price is going higher and we will then follow it," Kristianto said. In January, Indonesian feed mills paid around 2,500 rupiah ($0.26) per kg of corn, but this had now risen to almost 3,500 rupiah ($0.37) per kg, Bogor-based Kristianto added.
Rising prices will lead to an increase in slaughtered birds in the poultry industry, while more Indonesians are likely to switch to meat substitutes like tofu and tempe that are cheaper. Corn output in the archipelago will be between 8-9 million tonnes this year, little changed from last year, added Kristianto, a consultant with more than 25 years experience in the agriculture industry.
Indonesia's main corn crop is usually in the first quarter, with a mid-crop around September. "Not a big increase," he added. "We have a systemic problem in our country in food crops we have problems with land, policy, systems - the autonomous system in Indonesia ruins all efforts to grow agriculture. "Central government may have plans or programs but they cannot be executed because the bupati (district head) doesn't support it."
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