Currency rates have a profound effect on feed producers in Indonesia

Published 2024년 8월 29일

Tridge summary

Indonesian feed producers are experiencing higher costs due to the appreciation of the US dollar against the rupiah, despite falling global soybean prices. The strong US dollar is impacting the industry as 65% of feed production costs are from imported ingredients, primarily soybean meal. However, the depreciation of the rupiah has not significantly affected feed producers, as they are able to use locally produced corn in feed formulations. The weakening Brazilian real is helping Brazilian farmers better handle lower commodity prices denominated in dollars, allowing them to maintain their edge over US competitors.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Despite weakening global soybean prices, Indonesian feed producers are still incurring higher costs due to the appreciation of the US dollar against the rupiah. Although rupiah depreciation has not had a significant impact on the industry, a weaker real is enabling Brazilian farmers to better withstand lower commodity prices that are denominated in dollars. According to Bloomberg (July 2024), soybean prices for November had fallen by as much as 3.1% to US$10.94 per bushel at the close of trading on Monday 8 July 2024. Soybean prices continue to be pressured as global supplies are higher than last year, as tropical storm Beryl was expected to bring much-needed rain to dry areas and thus raise the likelihood of higher soybean crop yields. Desianto Budi Utomo, general chairman of the Indonesian Feedmills Association (GPMT) said that feed produced in the country contains 35% imported ingredients, but that their monetary value amounts to 65% of the total costs of producing feed. This ...

Source: Poultryworld