Feed Mills Suffer After Indonesia Bans Imports of Corn
Indonesia’s recent and sudden ban on imports of corn have left vessels carrying 480,000 tons of the grain stranded in the country’s ports, forcing feed mills owners and businesses to pay extra fees. The ban was put into effect by the Indonesian government as a means of boosting local corn production, but because of its sudden implementation, industries were not able to make the necessary adjustments.
The ships have yet to receive permits to unload their cargo at ports including Medan, North Sumatra, Jakarta, Surabaya, and East Java, forcing feed mill owners to pay a fee of about US$13,000 per day to the owners of the vessels for the extended inactive period of the ships, according to Indonesian Feed Millers Association secretary general, Desianto Budi Utomo.
The State Logistics Agency has been tasked with the temporary assignment of controlling the imports as the government plans to conduct a review to calculate the existing stocks and required corn imports.
Historically, between 22% and 27% of the country’s corn production is made available for the feed industry, and based on the Feed Millers Association calculations, local production will provide about 5.5 million tons of corn this year - resulting in a 3 million ton shortage compared to the 8.5 million tons required to reach the feed production goal of 16.5 million tons for the year.
The Indonesian government has targeted corn production for the year to reach 20.31 million tons – an increase of 4.1% over last year’s production of 19.5 million tons.