May 12, 2026
Centralising feed wheat imports through Indonesia's state firms risks distorting market, industry warns
A price gap of around US$100 per tonne between state and commercial channels has raised concerns that the policy could push up input costs across the poultry and livestock sector.
A senior Indonesian industry figure has cautioned that centralising feed wheat imports through state-owned enterprises such as PT Berdikari may introduce market inefficiencies that ultimately raise costs for the country's livestock sector. Saleh Husin, Deputy Chairman General of the Indonesian Chamber of Commerce and Industry (Kadin) for Industry, said while the policy rationale is understandable, a significant price differential of around US$100 per tonne signals potential distortion risks.
Saleh said the centralised import scheme gives the government greater control over supply management and helps reduce exposure to global price volatility, with state-owned enterprises positioned as stabilisation buffers in support of food security and industrial policy objectives.
However, he said the US$100 per tonne price gap indicates that the scheme risks eliminating competitive market mechanisms and increasing input costs for livestock producers. "This scheme risks creating market distortion due to the loss of competitive mechanisms and raises input costs for the livestock industry," he said.
He warned that higher input costs would not only compress margins for livestock operators but could also be passed on to consumers through higher food prices. Chicken, eggs and meat were identified as the sectors most exposed to the impact.
If import cost burdens are not managed efficiently, Saleh said the policy could amplify food price inflation — an outcome that would run counter to the government's original objectives.
He recommended a more balanced approach, allowing limited direct import options for industry players while retaining the state enterprise role as a market stabiliser. "This would be more effective in maintaining the balance between market stability and industry efficiency," he said.
