Industry Profie: Food Crop See Industry in Indonesia

MARKET INTELLIGENCE REPORT ON

DEVELOPMENT OF FOOD CROP SEED INDUSTRY IN INDONESIA

April 2009

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Production of certified rice seeds reaches 181,000 tons

Production of certified rice seeds in Indonesia includes ES and seeds with pink label. Until 2007, seeds with pink label were still produced in the country, but in 2008, production was no longer produced as the quality was poor.

Most rice seeds that consist of local seeds and composite seeds are produced government agencies such as seed centers and a small part consisting of hybrid seeds are produced by state companies and private companies.

The country's production of rice seeds in the past six years has continued to scale up. In 2007, the production of ES grew by 22% to 147.363 tons and that of seeds with pink label fell 70% to 161 tons, with the total production of certified seeds up 21.5% to 147,524 tons. In 2008, the production grew further by 23% to 181400 tons. Increase in the production certified seeds were attributable more too growing number of farmers using certified seeds.

The production of certified rice seeds is around 50% of the country's rice seed requirement of 300,000 tons per year with rice fields totaling 12.66 million hectares. The country's production of hybrid rice seeds in the past two years grew 21% . The production of hybrid seeds in 2007 reached 1,231 tons , up to 4,624 tons in 2008.

The high growth in production came with growing number of farmers aware of the benefit of using certified seeds. However, the production hybrid rice seeds are still very small in proportion - around 0.61% of the country's total production of seeds.

The high price of hybrid seeds contributes to keeping many farmers from using hybrid seeds . The price of hybrid seeds averages Rp50,000 per kg as against only Rp7,000 per kg of non hybrid seeds.

Production of hybrid rice seeds starts increasing

Business in the production of hybrid rice seeds has good prospects in Indonesia . The past several years gave seen a steady increase in the production of hybrid seeds. In 2006, production surged from 7.7 tons to 201 tons.

Increase was recorded in the following two years up 510% to 1,231 tons in 2007 and again by 275% to 4,624 tons in 2008.

The increase in production reflects good prospects of business in hybrid rice seeds industry.

There are 14 producers of hybrid rice seeds in Indonesia and three of them have an annual production of more than 100 tons . They are PT. BISI, SHS, and DuPont. BISI Internasional is the largest player in the business with production of 3,000 tons of hybrid rice seeds in 2008.

Production of corn seeds continues growing

Increase has also been recorded in the country's production certified corn seeds since 2005. In 2007, the production grew 24.3% to 38,349 tons. In 2008, the production rose further by 49.3% to 57,266 tons.

The country's production of hybrid corn seeds in 2003-2008 made up around 70% of the country's total production of certified corn seeds.

Hybrid corn seeds account for 56% of the total quantity of corn seeds used in the country in 2008.

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