World Grain - April 2018 - 20

COUNTRY FOCUS

Focus on Indonesia
Country's milling industry growing due to price
competitiveness of wheat-flour based food
by Chris Lyddon

Indonesia, the fourth most populous country in the world with more
than 260 million people, is a big agricultural producer, but the focus
is on rubber and palm oil. Wheat, which is an increasing part of the
diet of Indonesians, must be imported. The government is pushing
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According to the International Grains Council (IGC), Indonesia's
total grains production, all of it corn, in 2017-18 will come to 11.2
million tonnes, up from 10.9 million the year before.
The IGC puts Indonesia's total grain imports at 12.1 million tonnes
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11.5 million tonnes of wheat, up from 10.1 million in 2016-17 and
600,000 tonnes of corn, up from 500,000.
On Indonesia's wheat imports, the IGC commented in its February
report that "this month's biggest change is for Indonesia, where imports are being stimulated by growing food and feed demand; based
on reported trade to date, the projection is increased by 600,000
tonnes, to a new high of 11.5 million."
The USDA attaché reported in November that the biggest sellers of wheat to Indonesia in 2016-17 were Australia (48%), Canada
(17%), Ukraine (16%), and the United States (11%), noting that Australia's big share is due to the noodle industry's preference for Australian standard white wheat and Australia's proximity to Indonesia.
Indonesia's forecast rice production in 2017-18 is 37.5 million
tonnes, a rise from the previous year's 37.1 million, according to
the IGC. The country's rice imMALAYSIA
ports are put at 700,000 tonnes
PAPUA
NEW GUINEA
in 2017-18, up from 400,000 the
INDONESIA
year before.
Indonesia also produces soyEast Timor
beans, with output for 201718 forecast at 500,000 tonnes,
AUSTRALIA
down from 600,000 the previous
year. Its imports of soybeans are forecast at 2.7 million
tonnes, up from 2.6 million in 2016-17, while imports of
soymeal are forecast at 4.5 million tonnes, up from 4.4
million the previous year.
Corn imports are being held back because of the government's restrictions on imports, which have kept the domestic price
well above international levels, the USDA attaché reported in November.
"High corn prices and good moisture conditions are motivating
farmers to grow corn over soybeans," the attaché explained. "How20

Key Facts
Capital: Jakarta
Population: 260,580,739 (July 2017 est.)
Religions: Muslim 87.2%, Protestant 7%, Roman Catholic
2.9%, Hindu 1.7%, other 0.9% (includes Buddhist and Confucian), unspecified 0.4% (2010 est.).
Location: Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean.
Government: Presidential republic. Chief of state and
head of government: President Joko Widodo (since Oct. 20,
2014).
Economy: Indonesia, the largest economy in Southeast
Asia, has seen a slowdown in growth since 2012, mostly
due to the end of the commodities export boom. During the
global financial crisis, Indonesia outperformed its regional
neighbors and joined China and India as the only G20
members posting growth. Indonesia's annual budget deficit
is capped at 3% of GDP, and the government of Indonesia
lowered its debt-to-GDP ratio from a peak of 100% shortly
after the Asian financial crisis in 1999 to 33% today. While
Fitch and Moody's Investors upgraded Indonesia's credit
rating to investment grade in December 2011, Standard
& Poor's has yet to raise Indonesia's rating to this status
amid several constraints to foreign direct investment in the
country, such as a high level of protectionism. Indonesia still
struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment,
and unequal resource distribution among its regions. President Joko Widodo - elected in July 2014 - seeks to develop
Indonesia's maritime resources and pursue other infrastructure development, including significantly increasing its electrical power generation capacity.
GDP per capita: $12,400 (2017 est.); inflation: 4% (2017
est.); unemployment: 5.4% (2017 est.).
Currency: Indonesian rupiah (IDR): 13,770 rupiah equals 1
U.S. dollar (March 19, 2018).
Exports: $157.8 billion (2017 est.): mineral fuels, animal
or vegetable fats (includes palm oil), electrical machinery,
rubber, machinery and mechanical appliance parts.
Imports: $142.3 billion (2017 est.): mineral fuels, boilers,
machinery, and mechanical parts, electric machinery, iron
and steel, foodstuffs.
Major crops/agricultural products: Rubber and similar
products, palm oil, poultry, beef, forest products, shrimp, cocoa, coffee, medicinal herbs, essential oil, fish and its similar
products, and spices.
Agriculture: 13.9% of GDP and 32% of the labor force.
Internet: Code: .id; 65,525,226 users.
Source: CIA World Factbook

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