July 14, 2011

 

Indonesia's annual soy demand to rise

 

 

Although Indonesia's yearly soy consumption will increase up to 6% due to a rise in population, Southeast Asia's biggest economy is unlikely to attain self-sufficiency in 2014, chairman of the National Soybean Board said on Thursday.

 

Indonesia is struggling to increase soy production to stop its reliance on imported grains and aims to scrap imports by 2014, but domestic output has not increased significantly because of land constraints and low productivity.

 

"Consumption will increase by 4-6% annually because of population growth," said Benny Kusbini, who pegged Indonesia's consumption at 2.4 million tonnes in 2011.

 

"Imports range from 1.6-1.8 million tonnes, and they can also reach two million tonnes. My calculation shows that imports will not fall below 1.6 million tonnes, they may reach 1.8 million tonnes this year," he added.

 

In March, the National Soybean Board, which groups farmers and producers, expected imports to be flat at 1.7 million tonnes in 2011.

 

Indonesia, home to around 230 million people, imports 70% of its annual soybean requirements, mostly from the US, the world's top exporter. Soy is mainly grown in the main island of Java and also in parts of Sumatra.

 

The state statistics agency forecasts 2011 soy production at 819,450 tonnes, down from versus previous forecast of 934,000 tonnes, and lower than around 908,000 tonnes last year.

 

"Soy productivity in Indonesia is low at around 800-1,200kg per hectare. If you look at Brazil, it has already reached 2.6 million tonnes, while in the US and Canada, productivity is 2.8 million tonnes," said Kusbini.

 

"If we cannot boost productivity, we should at least expand plantations. I think it is impossible to say there is self-sufficiency by 2014 given the uncertainty in the procurement of new land."

 

Indonesia should at least add 1.5 million hectares of land in the next three years if it were to be self sufficient in soy, used to make tempe and tofu, popular as cheaper substitutes for meat, as well as soy sauce, said Kusbini.

 

Soy plantations cover around 900,000 hectares of land in Indonesia.

 

"We also have to bear in mind that the 900,000 hectares are not necessarily land specifically allocated for soy," said Kusbini.

 

The CBOT November soy contract rose above US$13.80 a bushel in Asian trade on Thursday (Jul 14).