February 19, 2015


Indonesia to resume chicken export to Japan, eyes other Asian buyers

Indonesian poultry suppliers are weeks away from making their first exports of processed chicken to Japan in a decade, an endorsement of quality that will boost the Southeast Asian nation's push into a regional market dominated by Thailand.

That is good news for global commodities giant Cargill Inc. and Indonesian food group, PT Indofood Sukses Makmur Tbk, which have announced plans to invest several hundred million dollars in Indonesia's poultry sector, aiming to tap a chunk of Asia's export potential, as well as strong domestic growth.

Japan cut off Indonesian imports around 10 years ago over avian-flu concerns, but agreed to a resumption after a visit by trade delegates to updated facilities on Java island last summer, said Nurlaila Nur Muhamad, director of agriculture and forestry product exports at Indonesia's trade ministry.

"The first Japan poultry shipment is now imminent," she said. "We have a chance at exporting to other countries, not only Japan ... The first choice is Asia."

Hit by scares over chicken meat safety in 2014, Japan was open to further diversifying its poultry supplies beyond China and Thailand, signing an agreement with Indonesia in late August that is expected to be worth up to US$200 million a year. Japan's total annual poultry imports were worth 150 billion yen (US$1.3 billion) in 2014.

In 2003, before the ban on shipments, Indonesian cargoes accounted for less than 1% of the total value of Japan's poultry imports.

As Japanese buyers are known for their strict quality controls, industry sources said the move could be seen a seal of approval for Indonesian chicken, stoking its potential to penetrate other Asian markets. The country's poultry exports are currently negligible.

Japanese government officials have confirmed that Indonesian shipments had been given the green light, but were unsure when they would begin. They also noted that fresh meat was not included.

Any boost to overseas demand for Indonesian goods would be welcomed by the new government of President Joko Widodo, after Southeast Asia's largest economy got off to a weak start to the year with overall exports in January falling more sharply than expected.

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