JAKARTA: Indonesia has stopped issuing import permits for corn used in feedmills and is looking at introducing rules that would only allow state procurement agency Bulog to import corn from next year, an agriculture ministry official said on Monday.
Indonesian President JokoWidodo, in power since October, is pursuing self-sufficiency targets in various foodstuffs and curbs on imports have been blamed for higher rice, beef and sugar prices.
The government stopped issuing import permits for corn used by feedmills in July in order to recalculate corn supply and demand for this sector, Muladno, director general of animal husbandry at the agriculture ministry, told reporters on Monday.
“The spirit of self-sufficiency should be started now, no matter how conditions are,” added Muladno. “Halting corn imports is part of this spirit.”
Only allowing Bulog the right to import corn from 2016 would be temporary, said Muladno, who was unable to give a timeframe.
Indonesian corn demand has grown in recent years due to rising wealth and higher demand for poultry. Southeast Asia’s biggest economy was forecast to import 3 million tonnes of corn this year compared with 3.1 million last year.
This is below the 3.5 million tonnes that the industry needed, the Indonesian Feedmills Association said.
Indonesia’s statistics agency sees corn output this year at 20.67 million tonnes, up from 19.01 million in 2014.
Indonesia imports mostly from Brazil and Argentina. It imposes a 5 percent import tariff and requires importers apply to the government for a permit.
Poultry feed firms with an Indonesian presence include PT JapfaComfeed Indonesia, PT MalindoFeedmill and PT Charoen Pokphand Indonesia.
Top commodities trader Cargill said earlier this year it is considering building a corn milling facility in Indonesia, but for that investment to be viable it would want the option to import corn if domestic supplies were lacking in quality or quantity.
After the worst U.S. drought in 56 years drove global prices of soybean and corn to all-time highs in 2012, Indonesia said it would gradually extend the role and reach of Bulog beyond rice to build bigger stockpiles of beef, corn, sugar and soybean.
As part of that food law, Widodo in June signed a decree allowing the government to cap prices of staple foods, cement and other basic goods during peak demand periods.
Government officials have blamed dry weather, food hoarding and speculators for fluctuating food prices this year.
