Agricultural Sectors in Indonesia

A Hot Tip about Agriculture and Animal Husbandry in Indonesia

Posted on: 3 Mar 2010

Cotton

Cotton, wheat, and soybeans are the leading U.S. agriculture exports to Indonesia. Indonesia is the fourth largest importer of cotton from the United States. Local production meets only one percent of total demand from the textile and textile products industry. Marketing Year (MY) 2008/09 Indonesia cotton imports are expected to slightly decrease to 2.1 million bales. Despite the high price of U.S. cotton compared to cotton from other suppliers, the United States continues to hold the largest market share in Indonesian cotton imports with a 42 percent share.

 

Soybeans

Indonesia is the world’s second-largest consumer of soybeans for food. Per capita consumption of soybeans, primarily in the form of tofu and tempe, is 10 kilograms annually and it will continue growing in line with the population growth. Therefore, soybean imports are forecast to grow to about 1.3 million tons in MY 2008/09. Tempe and tofu manufacturers continue to prefer U.S. soybeans over other suppliers, with U.S. market share at about 80 percent. However, this share is down from above 95 percent in recent years, as imports from South America continue to slowly erode U.S. dominance in the market.

 

Consumer Ready Food Products

The expansion of modern retail outlets in major urban areas throughout Indonesia, such as hypermarkets, supermarkets, and mini markets that have refrigeration and storage facilities provides good prospects for imported U.S. consumer-ready food products. The growth of franchise restaurants such as fast food, casual dining café’s, international and family style restaurants (specializing in Western and other non-Indonesian foods), food courts, as well as four and five-star hotels catering to the tourist industry also increase demand for imported food products. The introduction of new food products produced domestically, aggressive promotional activities, growth of modern retail outlets, customer sophistication, and growing health consciousness has driven the growth of the food-processing sector. This progress provides 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. Dairy products used as an ingredient for baby foods and toddler milk formulas lead this category. Snacking is a part of the Indonesian culture. With exposure to western-style foods and increases in snacking, U.S. snack food exports to Indonesia are expected to continue increasing.

 

Wheat

Despite the Australian dominance in the Indonesian wheat market, the severe drought that has hit Australia since 2006 has provided more opportunity for the United States to increase its wheat exports to Indonesia. Development and diversification in the bakery sector will continue to fuel demand for wheat-based products. The noodle industry contributes to 50 percent of overall Indonesia wheat flour consumption followed by the bakery industry (25 percent), biscuit (15 percent), fried meals (five percent), and household use (five percent).

 

 

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Posted: 03 March 2010

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