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WASHINGTON - Aug 6/07 - SNS -- Fresh milk production in Indonesian remains stagnant at 1.2 million liters per day and meeting about 25% of Indonesian demand for milk, reports the U,.S., agricultural attache for the country.

The gap is fulfilled from imports. Despite the soaring price of non fat dry milk as well as whole milk powder in the international market, imports of non fat dry milk are forecast to continue growing to 161,000 metric tons (MT) in 2008 as demand remain firm, while imports of whole milk powder are forecast to be stable at 27,000 MT in 2008.

Inefficient small-scale farms and poor farming practices continue to hinder further improvement in Indonesian milk production and milk quality. The high price of powdered milk in the international market has tightened the competition among the major Indonesian dairy processing companies to get their fresh milk from dairy cooperatives.

The Indonesian economy is expected to improve again in 2007. Economic growth is estimated to reach 6.3%, inflation at 6.5%, and the currency exchange is expected to remain stable at around Rp. 9,000 per US$ 1.

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