Wednesday 29 August 2012

Indonesia Seen Cutting Corn, Meal Imports On Record Costs

By Luzi Ann Javier - Aug 29, 2012
Bloomberg

Soybean-meal and corn imports by Indonesia may decline this year as meat producers struggle to cope with record prices of the feed ingredients and the government limits grain purchases, according to a millers’ group.

Meal imports will probably drop to about 2.2 million to 2.3 million metric tons, from 2.4 million to 2.5 million tons in 2011, Desianto Budi Utomo, secretary-general of the Indonesian Feed Mills Association, said in an interview. Corn imports may drop to 1.5 million tons from 3.1 million tons, he said today.

Soybean meal, mixed with grains to make feeds for poultry and pigs, and corn surged to all-time highs in Chicago this month as the worst U.S. drought in half a century cut supplies of oilseeds and grains. The surge raised global food costs and prompted speculation importers will be forced to cut purchases in so-called demand destruction, or seek cheaper alternatives. Indonesia is the world’s largest soybean-meal importer.

Indonesia’s soybean-meal purchases from India, the fourth- largest shipper, will probably increase 20 percent to 25 percent this year from about 350,000 tons in 2011, as feed-millers seek cheaper alternatives to U.S. supplies, Utomo said today.

Cassava, Bran

Most-active soybean meal, which peaked at $531.90 per 2,000 pounds on the Chicago Board of Trade on Aug. 27, traded at $522.30 at 11:17 a.m. in Singapore, 67 percent higher this year. Soybeans reached $17.605 a bushel on Aug. 27, the most expensive ever. Corn rallied to a record $8.49 a bushel on Aug. 10.

Indonesian millers are replacing some soybean meal with cheaper substitutes, including meat-bone meal, Utomo said in Phuket. Millers are mixing more cassava and rice bran into feed to cut the use of corn after the government imposed limits on imports to encourage farmers to boost planting, he said.

Indonesia may import 3.2 million tons of soybean meal in the 2012-2013 season compared with 3.07 million tons in 2011- 2012, according to a forecast from the U.S. Department of Agriculture. That makes it the largest single-country buyer.

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