Indonesia Corn: Installed Milling Capacity to Grow 13%


Jul 24, 2023 | Agricultural Markets News

Reading time: 2 minutes

Indonesia’s 2022/23 Corn harvested area is estimated to increase to 3.95 million hectares, while Corn yield is estimated to increase to 3.26 MT per hectare. Considering the high prices of Corn will continue incentivizing farmers to opt for growing Corn over other secondary crops, the 2023/24 harvested area is forecast to increase further to 4.0 million hectares. In line with the increase in harvested area, 2023/24 Corn production is forecast to increase to 13.1 MMT.

No significant pest and disease problems were reported during the 2021/22 crop year. Consumption Currently, Indonesia’s feed mill sector consists of 110 feed mills under 44 companies in 10 provinces, with 81 mills on Java Island. In 2023, the total installed capacity reached approximately 29.7 MMT, remaining on par with the installed capacity in 2022. Feed mills run at 70-75 percent of the full installed capacity.

The poultry industry consumes approximately 90 percent of domestic animal feed supplies, with aquaculture accounting for 6 percent and cattle and swine the remaining 4 percent. The MOA forecasts that the population of broilers in 2020–2024 will grow by 8.49% per year. BPS reported that 2022 broiler and layer populations were recorded at 3.2 billion heads and 378 million heads.

In 2023, feed mills are expected to produce 18.7 MMT of complete poultry feed, while poultry farmers are estimated to produce a total of 1.4 MMT of home-mixed feed. For aquaculture, a total of 1.7 MMT of feed was produced in 2022. In 2022, it is estimated that aqua feed production will be stable at 1.7 MMT.

Soaring international prices of Corn and wheat have encouraged feed mills to use local Corn as the primary energy source in feed. Corn usage in feed formulation in 2023 is expected to increase to 50–60 percent. The gap will remain filled with wheat purchased from local mills and other local feed ingredients. According to AgFlow data, Indonesia imported 67,030 tons of Corn from Argentina in June 2023.

Corn Milling in Indonesia

Corn milling capacity is continuing to grow. The industry’s installed capacity is estimated to increase to 4,500 MT per day in 2022/23, compared to 4,000 MT per day in 2021/22. The industry consists of four major players and remains the leading importer of Corn due to the food safety requirements for Corn in the wet milling process. In addition, two new ethanol plants are starting operation in 2023. Using Corn as the raw material, the total installed capacity for both plants are approximately 300,000 MT. Both the wet milling and ethanol industry require Corn with an aflatoxin content of less than 20 parts per billion (ppb) to produce food ingredients fit for human consumption, which local Corn cannot provide.

Rudimentary harvesting technology means domestically grown Corn is manually harvested with an average manual content of 35 percent. Most farmers dry their Corn under the sun and often improperly store it at the farmer level, frequently causing their Corn to reach aflatoxin levels far above 20 ppb. As a result, Corn wet mills cannot purchase local Corn as their raw materials. Wet millers prefer imported dent Corn over locally produced flint Corn due to its higher starch content.

The industry in 2022 produced a total of 300,000 MT, a decline of 6.52 percent from 320,000 MT in 2021. The industry also produced 152,000 MT of glucose syrup, a drop of 60.8 percent compared to 250,000 MT of glucose syrup produced in 2021. Approximately 80–90 percent of the Corn starch is used as the primary raw material for Corn vermicelli production, while most of the balance is used as a whitener by the paper industry. Prospects for wet mill expansion remain bright as Indonesia still imports 55 percent of the total demand for starch, providing ample opportunity for the local Corn milling industry to grow.

Other sources: USDA

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