July 23, 2007

Indonesia may remove 5 percent tariff on corn imports

To ensure that supplies will be adequate for the animal feed industry, Indonesia is mulling to scrap a 5 percent duty on corn imports, an agricultural official said on Friday (July 20).

Feed manufacturers may face shortage as locally grown corn are not suitable for animal feed, according to Djoko Said Damarjati, director general of processing and marketing of agriculture products at the Agriculture Ministry.

The duty removal would be done in a way that would not disrupt corn prices, he said.

Indonesia expects to produce 12.45 million tonnes of corn this year, up 7.24 percent from 11.61 million tonnes in 2006.

Budiarto Soebijanto, chairman of Indonesia Feedmills Association said local corn supply is also erratic which further stresses the need for feed producers to import the crop.

The domestic animal feed industry consumes 6-7 million tonnes of corn a year, according to data from the agriculture ministry.

This year, Indonesia is expected to import around 1 million tonnes of corn, lower than the 1.7 million tonnes the country has imported in 2006. The grains are sourced mainly from the United States.