June 23, 2005

Indonesia to have minimum prices for corn

To boost national corn production, the Indonesian government has agreed to establish a minimum price for corn in each province which will not be uniform across the country due to their varying conditions.

Having a minimum price is expected to have the effect of making Indonesia a corn exporter instead of a net importer, said National Corn Council Chairman Fadel Muhammad.

This is a possibility also because a number of countries are now facing a scarcity in corn supply such as Malaysia, which needs to import around 4 million tons a year and South Korea which needs 3 million tons.

Mr Muhammad also said that China has banned corn exports as its domestic requirement has shot up while production is declining.

He said that in addition, the Indonesian government has also agreed to restrict imports at harvest time to prevent the fall of corn prices.