July 2, 2010

Indonesia sees lower soy production for 2010

Indonesia's soy output is expected to drop nearly 5% this year because middling local prices have made the crop unattractive for farmers, according to government and industry officials.

The state statistics bureau on Thursday (July 1) announced soy production in 2010 is expected to fall 4.8% to 927,380 tonnes, from 974,512 tonnes in 2009 and also lower than the agency's March forecast of 962,539 tonnes.

"Soy is a secondary crop, so farmers only plant it when the prices are good," Rusman Heriawan, the statistics bureau head said.

The lower-than-expected production this year may push back the government's target to scrap soy imports by 2014 and may lead to higher soy imports in 2010.

Indonesia is forecast to import around 1.4 million tonnes of soy this year, a 7.7% increase from 1.3 million tonnes in 2009, said Ali Basry, director of the Indonesian representative office of the American Soybean Association - International Marketing.

The government plans a 1.2 million hectare food estate in Papua in eastern Indonesia, part of which will be allocated to soy production.

Indonesia imports about 70% of its soy, mostly from the US and very small amount from Argentina.