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More output for Indonesian feed millers

Indonesian feed millers expect their output to rise by about 7-8 percent this year due to increased demand from the poultry and aquaculture sectors, industry officials said.

Mills are expected to use around 60 percent of their capacity this year compared with about 50 percent now and 40 percent in previous years, said Thomas Bauer, head of Asia food and agribusiness research at Rabobank.

Indonesia's feed output was 7.6 million tonnes last year, while installed capacity is around 15 million tones, Firman Gunadi, secretary general of the Indonesian Feedmillers Association, told Reuters late on Tuesday.

"The situation now is more difficult after the fuel price hike. We are expecting people to consume cheaper animal protein sources like chicken, not beef or fish," said Gunadi. About 85 percent of Indonesia's feed output is absorbed by the poultry industry. Gunadi said soybean meal imports are likely to rise to 2-2.5 million tonnes this year from 1.9 million last year. Soybean meal accounts for about 20 percent of raw material for feed production.

While soybean meal imports are seen rising, the feedmillers association has projected corn imports are likely to fall to less than 400,000 tonnes in 2008 due to higher domestic output.

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