June 18, 2008
Poultry feed prices in Indonesia are likely to surge 15 percent by the end of the month to IDR 5,000 per kg due to difficulties in purchasing raw materials.
Broiler feed price has reached IDR 4,350 per kg while layer feed has hit IDR 3,750 per kg.
The raw material shortage was caused by a new requirement that disallows imports of several commodities without recommendations from the Department of Agriculture.
Over 700 containers of meat bone meal and other feed raw materials for June-July has been detained at port, according to data by the Association of Cattle Food Companies (GPMT). The containers were detained as the Department of Agriculture has yet to issue its import recommendation letter.
As a result of the supply cut, raw material stocks in large domestic poultry feed producers' warehouses had been shrinking rapidly. If the situation goes on, feed producers would have to either raise prices or stop production, said Budiarto Soebijanto, chairman of GPMT.
Budiarto said feed producers may use substitute raw materials such as poultry meat meal and fish powder, but they cost US$700 and US$1,200 per tonne respectively compared to meat bone meal's US$620 per tonne.
Anton J. Supit, chairman of the Association of Indonesian Poultry Companies, warned that the surge in feed prices would hit poultry farm businesses and it would also ultimately impact the consumers if poultry farmers are forced to increase prices.
In addition, the Minister of Agriculture Anton Apriyantono said 90 percent of the recommendation letters of the detained containers have been completed.
US$1 = IDR 9,306.05 (June 18, 2008)