August 6, 2003

Optimistic Outlook For Indonesia's Poultry And Feed Industry

The poultry industry in Indonesia has recovered fully from the 1997 financial crisis. Broiler production, which accounts for 60 percent of total poultry production, is expected to reach 735 million tons and 793 million tons in 2003 and 2004 respectively. In percentage terms, it represents annual growth rates of 16% and 8%.

However, the appreciation of the Indonesian Rupiah against the US dollar is of some concern. Compared to the first six months of 2002, the Indonesian Rupiah has strengthened nearly 12 percent against the US dollar in the first half of 2003.

Broiler production costs have increased because products such as feed and breeder stock are dominated by USD denominated imports.

In 2003, Day-Old-Chick (DOC) for broiler production are estimated at approximately 20 million head/week. In line with the expectation for growth in the sector, DOC are forecast to grow to 22 million head/week or about 1,144 million per year in 2003.

Feed Production

Indonesia's feed production will reach 7.3 million tons in FY 04 (excluding cattle feed, which approximately 0.6 million MT), an increase of 8 percent from the previous year (6.8 million MT in FY 2003) or around 75 percent of the 10 million MT feed production capacity, according to information from Indonesian Feedmillers Association.

About 60 - 65 percent of the chicken production costs are for chickenfeed (imported corn, soybeans, etc). To reduce the dependency on the imported corn, the GOI is starting to encourage domestic corn industry to increase production.

Source: USDA