Indonesia is considering scrapping a 5 percent duty on corn imports to ensure supplies for domestic animal feed industry, an agricultural official said on Friday.
The local animal feed industry has been facing shortages of corn supplies as most of the corn grown locally is not suitable for animal feed, said Gook Said Damarjati, director general of processing and marketing of agriculture products at the Agriculture Ministry.
"We are considering annulling the 5 percent import duty on corn so that animal food industries can secure their supplies," Damarjati said by telephone, adding that it would have to be done carefully to avoid disrupting domestic corn prices.
Indonesia expects to produce 12.45 million tonnes of corn this year, up 7.24 percent from 11.61 million tonnes in 2006. Local corn supply is also erratic, forcing producers to import corn as animal feed producers need consistent supplies, said Budiarto Soebijanto, chairman of Indonesia Feedmills Association. "We need to import to fill the supply gap when there are no supplies at home," said Soebijanto.
The domestic animal feed industry consumes 6-7 million tonnes of corn a year, according to data from the agriculture ministry. This year, Indonesia is expected to import around 1 million tonnes of corn. The country imported around 1.7 million tonnes in 2006, up from 400,000 tonnes in 2005. Indonesia imports corns mainly from the United States.