Behind the Anomaly of Corn Export Plan when Imports Still Running

Penulis: Safrezi Fitra

Editor: Safrezi Fitra

27/1/2019, 00.20 WIB

The Agriculture Ministry plans to export corn even though it has just requested additional imports for this commodity.

Telaah - Jagung
sonyaillustration/123rf

The government plans to export corn from national production when the harvest season arrives later this month until April. This is an odd plan as at the same time there are still 30.000 tons of imported corn that will enter Indonesia. Domestic price control is the main reason for the government to import and export corn.

The Agriculture Minister Amran Sulaiman revealed his export plan during a working meeting with the House of Representatives (DPR) Commission IV at the Parliament Complex on Monday (1/21). The peak of the harvest will make the national corn stock abundant, so exports can be done. The corn exports will be carried out from production centres in Sulawesi by focusing on the Philippines as the destination country.

According to Amran, exports are implemented if the domestic corn price falls below Rp 3,000 per kilogram (kg). “We are heading for the harvest in March-April. So it should be prepared from now on, but it’s certain to fall below Rp 3,000 per kg,” he said.

This is an odd export plan as the Agriculture Ministry has just requested additional imports, while the Trade Ministry had issued a permit to import 30.000 tons of corn for February. In fact, the total imports permitted for the first half of 2019 reached 440.000 tons even though the Agriculture Ministry previously stated that some corn production centres will start harvesting at the end of this month.

The Coordinating Economic Minister Darmin Nasution seemed to refute Amran’s statement, saying the corn harvest that occurred until April would not necessarily be able to cover national needs. “Although it’s harvested, how much is it? That’s the question. If it is abundant, the price has fallen,” he said when interviewed at the Office of the Coordinating Economic Ministry in Jakarta, Tuesday (1/22).

According to him, imports are the only effort made by the government to reduce the soaring price of corn. The high price of corn will have an impact on the rising price of eggs and chicken, even though people really need these two types of commodities.

Breeders in Indonesia are mostly small breeders who rarely have large warehouses to store corn. Thus, stock shortages will directly affect prices. The current price of local corn is still above Rp 5,000 per kg, while imported corn is only worth Rp 4,000 per kg. The government is concerned that the corn price will rise again to Rp 8,000 per kg if the imports are not implemented. 

Meanwhile, the Agriculture Ministry is optimistic to see a fairly large corn harvest in the first quarter of this year, which will affect the price decline. Based on the ministry’s forecast, there will be a production of 1.78 million tons of dried corn this month. The production rate will increase to 4.8 million tons in the next month and fall again to 3.6 million tons in March.

Corn demand is estimated at around 16 million tons this year. Last year, the national corn demand reached 15.5 million tons with 7.76 million tons for animal feeds, 2.52 million tons for independent breeders, 120.000 tons for seeds, and the remaining 4.76 million tons for the food industry.

When referring to the forecast, the average corn demand per month is only 1.3 million tons this year, which is smaller than the production of 1.78 million tons. Millions of tons of corn production will even flood the market next month.

Ekspor dan Impor Jagung 2018
(Statistics Indonesia/BPS)

According to the Agriculture Ministry, there is no need to worry about the import as the volume is small and would only be used as stock. However, there is still a debate about it between the Trade Ministry and the State Logistics Agency (Bulog). As the executor, Bulog has not yet execute the import until now.

Trade Minister Enggartiasto Lukita said the additional imports were a joint decision at the meeting chaired by the Coordinating Economic Minister Darmin Nasution. At the end of last year, the government issued an import permit for 100.000 tons, which has been realised by 99.000 tons until the beginning of this year.

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