November 2, 2009

Indonesian shrimp farmers less competitive on higher feed prices

Indonesian shrimp farmers became less competitive on the international market as local prices for shrimp feed are increasing, according to the farmers' association.


Shrimp is one of Indonesia's most reliable commodities in the fisheries sector. Last year, the country exported 179,409 tonnes of shrimp valued at US$1.02 billion. Most of the shrimp was exported to the US and EU.


Most shrimp feed is locally produced, but about 40 percent of the ingredients used to produce it - including fishmeal, cornmeal and soy flour - is sourced internationally, mostly from Chile and Peru. Therefore, currency fluctuations can have a major impact on price. Some of the key ingredients, like soy flour, is not produced in Indonesia.


Shrimp Club Indonesia (SCI) chairman Iwan Sutanto said the domestic price of feed, currently IDR10,000 a kilogramme, was about 15-percent higher than the price on the international market.


Iwan said shrimp feed accounts for about half of shrimp farmers' total costs, adding that the government needed to solve the problem before producers suffered further losses.


He also urged the government to reduce the 5-percent import tariff on shrimp feed ingredients but the request was declined.