Indonesia's poultry companies will enjoy a more favorable business environment this year with lower commodity prices and the lifting of Japan's ban on processed-chicken import from Indonesia, according to analysts as reported by the Jakarta Post.
Bahana Securities analyst Michael . Setjoadi said that lower corn and soybean price would help offset the adverse impact of rupiah depreciation for the sector, in which 80 percent of costs of goods sold (COGS) are imported. US soybeans have lost 7.3 percent in two weeks, the biggest decline since July, while corn has shed more than 4 percent over the same period, according to Reuters, Indonesia is one of the largest importers of US soybeans.
In addition to the drop in commodity prices, the country's poultry industry would likely also benefit from stabilized price of day-old chicks (DOC) and broilers, UOB Kay Hian analyst Franky Kumendong stated.
The DOC price currently stands at around Rp 3,100 (24 US cents) per chick, far better than the price in October of around Rp 1,000 to Rp 1,500 per bird. The average broiler price has also surged to around Rp 17,000 per kilogram (kg from around Rp 12,500 per kg in October, according to data from UOB Kay Hian. "Further support should come from Japan, with about 10 percent of global broiler chicken import,"Bahana Securities's Michael said.
Indonesia used to export frozen chicken's to Japan before the latter imposed a ban on Indonesia poultry and related products in 2004, when cases of avian influenza broke out in Indonesia.
While Indonesia is currently still included in the avian flu-affected zone, the World Organization for Animal Health (OIE) has recorded zero incidents of avian influenza activity in the country' poultry as of September last year.
Syukur revealed that Japanesse authories had approved three Indonesia publicly listed poultry firms, namely PT Charoen Pokphand Indonesia (CPIN), PT Japfa Comfeed Indonesia (JPFA) and PT Malindo Feedmill (MAIN), to start exporting their processed-chicken products to Japan.
CPIN corporate secretary Hadijanto Kartika informed that his firm was still in the preparation stage for exporting products to Japan, refusing to comment further, CPIN independent commisioner Suparman Sastrodimedjo said previously that his firm would export products to Japan when the country listed its ban.
UOB KayHian's Franky estimated that MAIN's revenue from is processed-chicken segment would grow by 20 percent year-on-year (y-o-y) this year, excluding potential growth from export to Japan.
MAIN has alloted a total capital expenditure of Rp 500 billion to expansion this year, aiming to grow its feed production capacity at a 29 percent compound annual growth rate (CAGR) from 900,000 tons in 2013 to 1.5 million tons this year, based on UOB KayHian data.
Source: Majalah Poultry Indonesia edisi Maret 2015 Vol.X
Bahana Securities analyst Michael . Setjoadi said that lower corn and soybean price would help offset the adverse impact of rupiah depreciation for the sector, in which 80 percent of costs of goods sold (COGS) are imported. US soybeans have lost 7.3 percent in two weeks, the biggest decline since July, while corn has shed more than 4 percent over the same period, according to Reuters, Indonesia is one of the largest importers of US soybeans.
In addition to the drop in commodity prices, the country's poultry industry would likely also benefit from stabilized price of day-old chicks (DOC) and broilers, UOB Kay Hian analyst Franky Kumendong stated.
The DOC price currently stands at around Rp 3,100 (24 US cents) per chick, far better than the price in October of around Rp 1,000 to Rp 1,500 per bird. The average broiler price has also surged to around Rp 17,000 per kilogram (kg from around Rp 12,500 per kg in October, according to data from UOB Kay Hian. "Further support should come from Japan, with about 10 percent of global broiler chicken import,"Bahana Securities's Michael said.
Indonesia used to export frozen chicken's to Japan before the latter imposed a ban on Indonesia poultry and related products in 2004, when cases of avian influenza broke out in Indonesia.
While Indonesia is currently still included in the avian flu-affected zone, the World Organization for Animal Health (OIE) has recorded zero incidents of avian influenza activity in the country' poultry as of September last year.
Syukur revealed that Japanesse authories had approved three Indonesia publicly listed poultry firms, namely PT Charoen Pokphand Indonesia (CPIN), PT Japfa Comfeed Indonesia (JPFA) and PT Malindo Feedmill (MAIN), to start exporting their processed-chicken products to Japan.
CPIN corporate secretary Hadijanto Kartika informed that his firm was still in the preparation stage for exporting products to Japan, refusing to comment further, CPIN independent commisioner Suparman Sastrodimedjo said previously that his firm would export products to Japan when the country listed its ban.
UOB KayHian's Franky estimated that MAIN's revenue from is processed-chicken segment would grow by 20 percent year-on-year (y-o-y) this year, excluding potential growth from export to Japan.
MAIN has alloted a total capital expenditure of Rp 500 billion to expansion this year, aiming to grow its feed production capacity at a 29 percent compound annual growth rate (CAGR) from 900,000 tons in 2013 to 1.5 million tons this year, based on UOB KayHian data.
Source: Majalah Poultry Indonesia edisi Maret 2015 Vol.X
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