by PressIndonesia’s wheat and rice imports forecast to decline
Wheat and rice imports decline due to lower demand
In the 2024-2025 agricultural season, FAS forecasts a decline in Indonesia’s wheat and rice imports. Shipments will decrease by 8% compared to the previous period.
The 2023-2024 season was a record season for Indonesia. At that time, the country imported nearly 13 million tonnes of wheat. The main factors behind the increase in imports were:
— growth in demand from feed mills;
— higher consumption of wheat-based products by Indonesians;
— increased sales of cheap varieties of rice.
However, the situation has changed in the current season, resulting in a decrease in imports. On the domestic market, poultry meat sales have declined, forcing a reduction in feed production.
Indonesia is completely dependent on grain imports, as it does not grow any of its own. Australia is the main supplier, accounting for 32% of total purchases. Canada is the second-most important supplier, with 20% of supplies.
The largest buyer of wheat in Indonesia remains P.T. Bogasari. The company operates flour mills and is considered to be one of the largest in the world. The company’s mills process about 12,000 tonnes of grain per day, with an annual production capacity of 4 million tonnes.
Rice production overview
The decline in overseas rice shipments is due to an increase in domestic production. Imports are expected to fall by 74% to 1 million tonnes, compared to almost 4 million tonnes in 2023-2024. At the same time, domestic rice production should increase by 3% to around 34 million tonnes.
Government policies are driving production growth. The Indonesian authorities have set a new course to improve consumer safety. Within five years, the country must increase its rice harvest to eliminate rice imports. However, experts are sceptical about such ambitious plans. The record for rice production in Indonesia was the 2017-2018 season when 37 million tonnes were harvested. Since then, yields have fallen to around 30 million tonnes. Even if production increases, the country will not be able to return to its highs quickly.
There are also risks to the harvest. The main one is El Niño. At the beginning of 2024, this natural phenomenon caused drought, which reduced the harvest. In addition, the lack of rain forced farmers to start sowing and harvesting later, resulting in a lower volume than the planned 32 million tonnes.
Meteorologists are not forecasting severe drought for the current and future seasons. But an El Niño effect is still possible.