CPIN - Potential margin risks from SBM import centralization

CPIN - Potential margin risks from SBM import centralization Charoen Pokphand Indonesia (CPIN) could likely benefit from festivities with better chicken (Livebird and Day Old Chick) Average Selling Prices (ASP) in 4Q25F and 1Q26F. At the same time, the company also done its voluntary culling of Day Old Chicken (DOC) and Grand Parent Stock (GPS), in order to stabilize the oversupply condition. However, the company faces significant regulatory headwinds regarding input costs. Starting April 2026, the Indonesian government will centralize soybean meal (SBM) imports through the state-owned enterprise Berdikari (ID FOOD). This policy is expected to shift sourcing to the United States, which offers better quality but is estimated to be 10% more expensive than the Latin American supplies (Argentina and Brazil) typically purchased by poultry integrators. Given that SBM accounts for 20% to 25% of raw material costs, this shift poses a direct risk to margins. Furthermore, while the government has increased the 2026 GPS import quota to 800,000 birds (vs 580,000), the additional allocation prioritizes smaller breeders and SOEs, leaving major integrators like CPIN without significant quota increases. (Source : Bisnis Indonesia)