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ndonesia'€™s poultry companies will enjoy a more favorable business environment this year with lower commodity prices and the lifting of Japan'€™s ban on processed-chicken imports from Indonesia, according to analysts.

Bahana Securities analyst Michael W. Setjoadi said that lower corn and soybean prices would help offset the adverse impact of rupiah depreciation for the sector, in which 80 percent of costs of goods sold (COGS) are imported.

US soybeans have lost 7.3 percent in two weeks, the biggest decline since July, while corn has shed more than 4 percent over the same period, according to Reuters. Indonesia is one of the largest importers of US soybeans.

In addition to the drop in commodity prices, the country'€™s poultry industry would likely also benefit from stabilized prices of day-old chicks (DOC) and broilers, UOB Kay Hian analyst Franky Kumendong stated.

The DOC price currently stands at around Rp 3,100 (24 US cents) per chick, far better than the price in October of around Rp 1,000 to Rp 1,500 per bird. The average broiler price has also surged to around Rp 17,000 per kilogram (kg) from around Rp 12,500 per kg in October, according to data from UOB Kay Hian.

'€œFurther support should come from Japan, with about 10 percent of global broiler chicken imports [...],'€ Bahana Securities'€™ Michael said.

Japan was showing more interest in importing poultry products from Indonesia because of the poor quality of Chinese broilers, he went on.

Agriculture Ministry director general for livestock Syukur Irwanto, meanwhile, said that Japan'€™s authorities had lifted the ban on processed-chicken imports from Indonesia in November last year.

'€œThis is a fundamental change [for the poultry industry]. This is the first time we can start exporting our processed-chicken products after a ban that lasted around 10 years,'€ he told The Jakarta Post.

Indonesia used to export frozen chickens to Japan before the latter imposed a ban on Indonesian poultry and related products in 2004, when cases of avian influenza broke out in Indonesia.

While Indonesia is currently still included in the avian flu-affected zone, the World Organization for Animal Health (OIE) has recorded zero incidents of avian influenza activity in the country'€™s poultry as of September last year.

Syukur revealed that Japanese authorities had approved three Indonesian publicly listed poultry firms, namely PT Charoen Pokphand Indonesia (CPIN), PT Japfa Comfeed Indonesia (JPFA) and PT Malindo Feedmill (MAIN), to start exporting their processed-chicken products to Japan.

CPIN corporate secretary Hadijanto Kartika informed the Post that his firm was still in the preparation stage for exporting products to Japan, refusing to comment further.

CPIN independent commissioner Suparman Sastrodimedjo said previously that his firm would export products to Japan when the country lifted its ban.

Neither JPFA and MAIN, meanwhile, responded to the Post'€™s enquiries about their plans to export processed-chicken products to the East Asian country.

UOB KayHian'€™s Franky estimated that MAIN'€™s revenue from its processed-chicken segment would grow by 20 percent year-on-year (y-o-y) this year, excluding potential growth from exports to Japan.

MAIN has allotted a total capital expenditure of Rp 500 billion to expansion this year, aiming to grow its feed production capacity at a 29 percent compound annual growth rate (CAGR) from 900,000 tons in 2013 to 1.5 million tons this year, based on UOB KayHian data.