June 7, 2011


Indonesia's purchases of US grain increasing rapidly



Indonesia's food sector has been expanding rapidly over the last few years and the trend is set to continue, presenting clear opportunities for processing companies and US grain exports.


US farmer checkoff funds, combined with Market Access Program (MAP) and Foreign Market Development (FMD) funds spent in Indonesia, generated a return of 1,750% and resulted in more than US$52.5 million in new US grain purchases in fiscal year 2011.


One company in particular, PT Redwood, has worked to become the premier provider of corn-based products and starch derivatives for Indonesia - Asia's third most populous country.


Identifying PT Redwood's potential to import US corn, the US Grains Council began to reach out to the company in 2010 as part of its market development program.


In January 2011, the Council forged a cooperative agreement with PT Redwood to provide trade and technical assistance to the company's management team and to educate them on the advantages of using US corn in wet milling operations. In exchange for this assistance, PT Redwood agreed to give preference to US corn when competitively priced.


Since signing a memorandum of understanding, PT Redwood has switched from purchasing corn solely from Argentina and Brazil to importing only US corn for its wet milling needs. Since the start of the Council's cooperation, PT Redwood purchased 178,985 tonnes (seven million bushels) of US corn, valued at US$52.5 million.


These purchases are a direct result of the Council's US$30,000 program (in FY 2011) to provide trade and technical assistance. PT Redwood's plant plans to double its current capacity by year-end.

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