July 8, 2016
 
Indonesia restricts wheat imports, wants feed mills to tap into local corn
 

    

Indonesia is toughening its stance on food self-sufficiency by restricting wheat imports so that animal-feed mills will be compelled to turn to local corn, said Nasrullah, director of animal feed at the country's agriculture ministry.

 

The capping of corn imports this year had prompted a spike in overseas wheat, Reuters reported. While feed-grade wheat imports are not suspended, the government is regulating deliveries to "protect farmers and domestic production", Nasrullah added. "If domestic corn is available, it means imports are not needed." Additionally, the duration of the restriction depends on the availability of local corn stocks.

 

According to the Indonesian Feed Mill Association, the government's recent action has held back 450,000 tonnes of wheat from reaching Indonesian shores. About 200,000 tonnes of wheat shipments are still stuck at the country's harbours, Desianto Budi Utomo, secretary general of the association, claimed. "(The government) says (the shipments) will be released in stages," Utomo remarked, pointing to yet another 200,000 tonnes of shipments on its way which may not be permitted into Indonesia. 

 

The restriction is likely to elevate grain prices, traders said. One European trader explained that the development could also impact international markets.

 

From January this year, Indonesia has brought in 1.5 million tonnes of feed by July following restrictions on corn imports, Utomo said. Meanwhile, the price difference between feed and milling wheat has shrunk to about US$4 to US$5 per tonne, compared to US$10 in 2015, a Singapore trader commented.