Strength
Limited upside for soybean meal prices due to higher-than-average 2025 production growth estimates from Brazilian farmers (+8.2% YoY, vs. 5Y Avg: +1.4% YoY), boosting profit margins; continued low GPS import quota in 2025 (560k) and weekly PS culling to help support DOC and live bird prices
Weakness
Given that corn constitutes a large part of the poultry industry’s COGS (41%), readjustment of corn prices to IDR 5,500/kg (+10%, effective 1 February 2025) may pressure the sector’s profitability margins
Opportunity
In 2025, the government's free meal program will add 637k tons or +13% higher to Indonesia's total chicken sales volumes of 5,579k tons; this should allow for poultry players to outperform the market this year
Threat
Weakened purchasing power may lead to unexciting growth or zero-sum outcome; IDR depreciation may cause higher raw materials resulting in margin squeeze; recent market outperformance by some poultry players could trigger profit-taking from investors
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