Indonesia Animal feed market is expected to grow at a compound annual growth rate of 5.13% over the forecast period to reach a market size of US$12.208 billion in 2025 from US$9.043 billion in 2019.The export forecasts for beef and chicken meat trade have been constrained due to the current threats from the spread of the COVID-19 virus. This has invariably dampened the demand for animal protein. Further, the widespread closure of the food and beverage establishments, especially those of food services as well as the reduction of tourism and travel has affected the demand for protein. Furthermore, disruptions in shipping have affected global trade resulting in creating choke points and ports and hampering container availability, for the time being. Reflecting on the Indonesian economy, during late February 2020, the economic growth estimates were revised from 5.1 percent to 5 percent [Source: Indonesia Central Bank (Bank Indonesia)] due to a global economic slowdown and COVID-19 pandemic. After the official announcement from the Government of Indonesia on confirmed cases of COVID-19 in Indonesia, it has implemented various measures to reduce to the spread, including limiting travel, social distancing, and banning large gatherings. Consequently, the weakening Rupiah,which reached Rp. 16,273 to the dollar, approaching levels last seen during the 1998 financial crisis which conveyed overall stress in the Indonesian economy. The Indonesian economy is expected to fall below 5 % in 2020 [ Source: USDA].
on February 10, 2020, the Ministry of Trade (MOT) issuedregulation number 7/2020 on Buying Reference Prices at Farmer’s Level and Selling Reference Prices atCustomer Level for several commodities, to ensure stable supply and prices. The poultry industry consumes significant share of domestic animal feed supplies followed by aquaculture that consumes and cattle and swine the afore mentioned MOT regulation sets up buying prices of chicken meat, day-old chicks, and egg due to the fluctuating prices of poultryproducts. To support the MOT regulation, and to ensure a balance of supply and demand of day-oldchicks, on February 20, 2020, the Ministry of Agriculture (MOA) issued a circular letter on hatching eggs.The letter requires integrated poultry farmers to withdraw a total of 15 million of 19-days old hatchingeggs from hatching machine every week for February 4 – 29, 2020. The policy is expectedto reduce day old chick production by approximately 40 million head by the end of March 2020. At theend of December 2019, integrated poultry farmers produced a total of 262.9 million hatching eggs. The policy, combined with lower consumption due to COVID-19, is expected to lower overall poultry meatproduction in 2020.
Besides, On December 12, 2019, Minister of Agriculture Syahrul Yasin Limpo issued a Ministerial Decree declaring an African swine fever (ASF) outbreak in North Sumatera Province.The decree was followed by a notification from the Director-General of Livestock and Animal Health Service and Indonesia’s Chief Veterinary Officer to the World Organization for Animal Health (OIE). As of February 6, 2020, Indonesia had reported 857 outbreaks, in 18 of 33 districts of North SumateraProvince, resulting in about 42,000 dead hogs. The ASF outbreak began in Dairi District and spread to 17 other districts, including Medan, the capital of theprovince. Indonesia’s animal health authorities estimated the outbreak onset was September 4, 2019. An ASF outbreak would likely hamper the East Nusa Tenggara Province (NTT), (located next to Timor Leste) and its plan to become Indonesia’s hog production center. Besides, contrasting extensive economic headwinds, impacts from African swinefever in China, and other countries remain a dominant factor in the market for pork. [Source: USDA].
However, the combination of population growth and strong economic growth between 1998 and 2008 resulted in Indonesian meat consumption more than its double. Over the 20 years to 2018 from 1998, per person, meat consumption has grown strongly in Indonesia (by 89%). A rapid rise in fish consumption has been driven by strong growth in domestic fish production compared with other meats. Fish remains the significant source of protein in Indonesia, largely unchanged from 1998. Per person consumption in Indonesia increased markedly with small increases in income over the period [Department of Agriculture, Water and the Environment]. Thus, despite the current uncertainties the Indonesian animal feed market is poised for healthy growth during the forecast period.