Indonesia - Agriculture Indonesia - Agriculture
Cotton
Indonesia produces 0.3 percent of its total domestic cotton demand. Official reports indicate that production fell dramatically due to high production costs and agronomic risks.Cotton imports for 2017/18 are estimated to decline to 3.2 million bales compared to the previous estimate of 3.5 million bales due to less competitiveness against synthetic fibers. Despite synthetic fiber’s price increasing in line with fossil fuel prices, availability to source the fibers from domestic producers has provided manufacturers with better cash flow management and higher margin than producing yarn from imported cotton. Overall improving domestic market conditions due to less illegal imports of textile and textile products as well as growing middle-class incomes are increasing demand for higher quality fabrics, providing opportunity for cotton consumption. The World Bank reported in December 2017 that Indonesia’s middle-class accounts for approximately 52 million people whose consumption accounts for about 42 percent of total household expenditure. Industry association expects the overall textile industry to grow by 5 percent annually, in line with Indonesian economic growth. These factors combined with expected higher demand for campaign material during the upcoming 2019 election year will drive higher imports of cotton in 2018/19, which is forecast to rebound to 3.3 million bales.
Exports of U.S. Cotton to Indonesia ($US Million)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018* |
| 524.1 | 193.3 | 287.1 | 325.7 | 295 | 346 | 501.6 | 264 |
Exports of U.S. Cotton to Indonesia (Thousand Tons)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018* |
| 157.1 | 78.4 | 138.7 | 167.0 | 189 | 219.7 | 287.6 | 153.5 |
Soya Beans
Indonesia is the world’s second-largest consumer of soybeans for direct human consumption. Tempe and tofu makers are the largest soybean consumers in Indonesia, accounting for nearly 90 percent of total domestic soybean consumption. Tempe and tofu manufacturers prefer U.S. soybeans’ texture and quality.FAS Jakarta expects Indonesia consumption will reach 3.37 million metric tons in 2018/19, a 2 percent increase over previous marketing year. Indonesia is estimated to import 2.7 MMT of soybeans in MY 2017/18, and is expected to continue to grow, as local production remains stagnant.
Exports of U.S. Soybeans to Indonesia ($U.S. Million)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018* |
| 861.5 | 996.6 | 984 | 1,030 | 773 | 989 | 922 | 324 |
Exports of U.S. Soybe ans to Indonesia (million MT)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018* |
| 1.7 | 1.8 | 1.7 | 1.9 | 1.9 | 2.6 | 2.4 | 0.8 |
Consumer-Ready Food Products
The expansion of modern retail outlets with refrigeration and storage facilities throughout Indonesia’s major urban areas provides good prospects for imported U.S. consumer- ready food products. The growth of franchise restaurants specializing in Western and other non-Indonesian foods, food courts, and four and five-star hotels are also increasing demand for imported food products. Notably, the variety of bakery products have expanded tremendously, as bakery chains and doughnut shops have opened throughout big cities since 2000. These establishments cater to higher income consumers and often feature baked goods with berry fillings, cream cheese, shredded meat, cheese, almonds, and white, dark and milk chocolate. Bakery sector continues to require imported specialty mixes of flour, oats, rye, dried fruits and nuts, butter, cream cheese, full cream milk powder, and non-dairy creamer in their products.
The introduction of new domestic- produced food products, aggressive promotional activities, growing customer purchasing power, and growing health consciousness is driving food-processing sector growth. These developments provide a potential market for U.S. food and agricultural ingredients, especially dairy products. More consumers are expected to make purchasing decisions based on health and wellness concerns. Dairy and fresh fruit products are considered healthy, with dairy ingredients for food and beverage manufacturing leading this category. Snacking is a part of the Indonesian culture. With exposure to western-style foods and increases in snacking, U.S. exports of snack foods as well as ingredients for the Indonesian snack food manufacturing industry are expected to continue increasing.
Exports of U.S. Consumer Ready Food to Indonesia ($US Million)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
| Dairy Products | 161 | 212.7 | 191 | 315.8 | 274.9 | 183 | 157.8 | 133.1 |
| Fresh Fruit | 96 | 110 | 112 | 70.7 | 93.4 | 64.2 | 81.5 | 64,4 |
| Prepared Food | 32 | 61.1 | 67 | 78.1 | 74.1 | 66.2 | 59.6 | 74.7 |
| Processed Vegetables | 25 | 27.5 | 32 | 35.8 | 36.9 | 37.6 | 40.1 | 42.8 |
| Beef &Beef Products | 25 | 28.4 | 9 | 16.8 | 26.8 | 11.9 | 39.4 | 53.7 |
| Processed Fruit | 7 | 10.9 | 12 | 12.8 | 10.4 | 8 | 12.3 | 11.8 |
| Non- Alcoholic Bev + Juices | 7 | 12.2 | 11.6 | 8.1 | 9.5 | 11.8 | 15 | 11.1 |
| Tree Nut | 5 | 3.9 | 5 | 9.4 | 8.4 | 11.6 | 11.8 | 9.5 |
| Chocolate & Cocoa Products | 2 | 4 | 4 | 10.4 | 7.1 | 11.7 | 2.6 | 11.6 |
| Dog & Cat Food | 3 | 4 | 4.5 | 7.7 | 7.2 | 7.4 | 5.9 | 5 |
| TOTAL | 363 | 474.7 | 447.2 | 565.6 | 549.6 | 413.7 | 426 | 353.3 |
Wheat
With expectations for higher 2018/19 corn production reducing feed mills’ demand for wheat, 2018/19 wheat imports are forecast to slightly decline to 12.3 million tons. Similarly, 2018/19 wheat consumption for feed is expected to decline to 2.0 million tons from 3.2 million tons in 2017/18. The significant increase in wheat imports and wheat consumption in 2017/18 is due to GOI’s corn import restrictions. FSI wheat use is forecast to continue growing to 9.3 million tons in 2018/19, in line with higher demand from the high end bakery sector and population growth.
Exports of U.S. Wheat to Indonesia ($US M illion)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018* |
| 268.5 | 229.5 | 213.5 | 260.9 | 105.2 | 192.2 | 290.7 | 43.2 |
Exports of U.S. Wheat to Indonesia (Thousand Tons)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018* |
| 816.0 | 730.0 | 722.2 | 922.7 | 428 | 961.2 | 1,473 | 203.7 |