New Indo feed grain market
Australian grain farmers could be cashing in on a new $150 million-a year-market as soon as April after a new trade deal opened the floodgates for feed grain to be sent to Indonesia.
The Indonesia-Australia Comprehensive Economic Partnership Agreement, coined IA-CEPA, was officially ratified by the Indonesian Parliament last Thursday, unlocking a new market for Australian agriculture.
Indonesia is the world’s fourth-biggest country by population, and its food consumption is predicted to quadruple by 2050.
Under the new deal, 99 per cent of exports will eventually be allowed to enter Indonesia tariff-free or with vastly loosened barriers.
Included in the deal is an agreement for Indonesia to take 500,000 tonnes of duty-free feed grain a year, starting in April, including grains such as barley, wheat, and sorghum.
The deal includes provisions for the feed grain market to grow by 5 per cent a year for five years in what GrainGrowers Limited has named a boon for Australian farmers.
GrainGrowers chairman Brett Hosking said the feed grain quota was a “big win” for farmers, and came five years after the Indonesian Government put feed grain restrictions in place.
The provision means Australia is now the only country with rights to export feed grain to Indonesia.
Mr Hosking said the feed grain quota was equivalent to 12 B-double truckloads of grains.
“We would like to sincerely thank the Australian Government for the significant efforts directed towards this really positive outcome for grain farmers,” he said.
The first lot of Australian feed grain could be sent to Indonesia as soon as April and is likely to be predominantly used to feed broiler and laying chickens.
However, Mr Hosking said burgeoning domestic demand meant it was unlikely grain would be sent to Indonesia before the 2020-21 harvest kicked off in November.
Indonesia is traditionally Australia’s biggest wheat market, taking about $1.5 billion worth of wheat each year.
Restrictions on feed imports since early 2015 have excluded Australia from that market.
Australian Export Grains Innovation Centre chief executive Richard Simonaitis said WA was likely to become a “major supplier” of feed wheat and barley to Indonesia.
Other grain benefits include the elimination of tariffs on most remaining cereals and grains, and elimination of the 5 per cent tariff on rolled oats and unroasted malt.
Trade Minister Simon Birmingham said the trade deal was good news for WA farmers and businesses, as well as for job creation.
Get the latest news from thewest.com.au in your inbox.
Sign up for our emails