December 16, 2003

 

 

Indonesia 2003 Soybean Imports To Fall 9%

 

Indonesia's 2003 soybean imports are projected to fall nearly 9% to 1.25 million tons amid weak demand and the end of a U.S. farm credit guarantee programme, a key industry body said on Tuesday.

 

The country imported around 1.37 million tons of soybeans, mostly U.S. number one, in 2002.

 

Demand was seen falling due to a shift in eating habits of Indonesians to chicken and eggs from soybean-based snacks as household incomes rise.

 

Indonesia's economy grew 3.93% in the third quarter from the same period last year, helped by a global recovery and growing purchasing power.

 

"The trend shows chicken and eggs are far more attractive now than tempe and tofu," said Ali Basri, chairman of the American Soybean Association.

 

Soybeans are imported for food, with the bulk used to make tempe, a fermented whole soybean product popular among Indonesians.

 

The end of a farm credit guarantee programme from the U.S. government, known as GSM-102, in fiscal year 2001/02 also helped lower soybean imports this year, the official said.

 

The programme underwrote credit from private U.S. banks to approved foreign banks to finance U.S. agricultural sales. It was mainly used by local importers to purchase corn, soybeans and soymeal.

 

"Imports in 2002 were higher than this year because of GSM carryover until March, and we can see there is a downward trend afterwards as importers have returned to buy through normal commercial schemes," Basri said.

 

The association had a bullish forecast for next year's imports at 1.3 million tons, an increase of 4%.

 

"Based on a realistic estimation, there should be an increase of four percent. This year's soybean output must be taken into consideration," he said.

 

Traders said Indonesia's soybean production this year was expected to be only 700,000 tons. The government had targeted 800,000 tons.

 

Currently, soybean supplies in Indonesia are plentiful, and five shipments totaling 205,000 tons of U.S. soybeans are scheduled to arrive this month, traders said.

 

Teluk Intan bought 100,000 tons, Cargill 40,000 tons, Indo Grain 25,000 tons and Sekawan Makmur 40,000 tons, they said. The soybeans were quoted at $330 per ton, cost-and-freight basis.

 

"U.S. soybeans are expensive, but we have no choice but to buy them because of consumer preference," a trader said.

 

Traders said they had not booked the grain for January through March shipments due to ample supplies.

 

"We might take positions in February when prices have corrected," another trader said, referring to the period when South America harvests soybeans.

 

South America grows nearly half of the world's soybeans and the United States one-third.