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GrainGrowers seeks improved access for feed grains into Indonesia

by Grain Central, 15 August 2017

GROWER representative body, GrainGrowers, is seeking improved market access for Australian feed grain in Indonesia, as part of current negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

GrainGrowers’ trade and economics manager, Luke Mathews.

In a submission on behalf of the grains industry, GrainGrowers says Indonesia is currently Australia’s largest export market for wheat, valued at $1.3 billion per annum, however the trade is almost exclusively for flour milling purposes.

“The Indonesian Government is currently not issuing import permits for feed grains, including feed wheat,” GrainGrowers’ trade and economics manager, Luke Mathews, said.

“We estimate the total underlying size of the Indonesian feed grain import market at 2-3 million tonnes per annum, equating to a value AUD$550 to $825 million (AUD free value).

“This is a substantial potential market for Australia, larger than the current Australian-Indonesian live cattle trade which is valued at roughly $540 million.

“In addition, Indonesia’s demand for feed grains is increasing at an estimated 1.1 million tonnes or 7 per cent per year, driven by a rapidly expanding livestock sector.”

Mr Mathews said Indonesia was a lucrative market for Australia, favourably located within close proximity, and would complement Australia’s existing milling wheat trade with Indonesia.

“Furthermore, Indonesia’s current restrictions on feed grain imports has resulted in an increase in Indonesian feed grain prices. Artificially high Indonesian feed prices threaten the current expansion of the Indonesian stockfeed manufacturing and livestock production sectors,” he said.

“Resolution of this issue would provide win-win outcomes for both Indonesian livestock and Australian grain industries.”

Negotiations to achieve closer economic engagement between Australia and Indonesia through the Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA) were re-started by Trade Ministers in March last year.

Negotiators meet about every three months with the latest negotiations occurring last week.

The Department of Foreign Affairs and Trade asked for submissions from stakeholders on all aspects of trade with Indonesia in order to inform the agenda.

GrainGrowers’ submission was prepared following extensive engagement with the wider grains industry.

Source: GrainGrowers

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