20 January 2022 (closed)
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Imports of wheat into Indonesia only rose by 4 percent year-on-year (y/y) to 5.97 million tons in the first half of 2018. This very modest growth is below expectations. Moreover, it means that the trend of declining wheat imports into Indonesia (that started from 2016) continues. Subdued consumer purchasing power and the weak rupiah are blamed for these weak imports.
However, based on the latest data from Statistics Indonesia (BPS), wheat imports into Indonesia amounted to USD $1.73 billion in the first half of 2018, up 28.1 percent (y/y) from USD $1.35 billion in the same period one year earlier. This big jump in value is caused by the weaker rupiah rate.
Ratna Sari Lopes, Executive Director of the Indonesian Flour Producers Association (in Indonesian: Asosiasi Produsen Tepung Terigu, or Aptindo), said not all wheat imports are used as raw material for flour. "Actually, nowadays, quite a lot of wheat that is imported into Indonesia is used to feed livestock," she added.
The Indonesian Feed Millers Association (in Indonesian: Gabungan Pengusaha Makanan Ternak, or GPMT) has been raising wheat imports considerably in recent years. Whereas in 2017 it only requested to import 200,000 tons of wheat, the figure rose to 1.57 million tons in the first half of 2018.
Meanwhile, in full-year 2017 Indonesia imported 11.3 million tons of wheat. Of this total, 8.5 million tons were used for the production of flour, while the remainder went to livestock.
Sribugo Suratmo, Deputy Chairman of the Indonesian Food and Beverage Association (Gapmmi), said flat wheat imports are in line with stagnant production and sales in Indonesia's food and beverage industry so far in 2018. He added that food and beverage factories indeed raised production in the context of the Ramadan month and subsequent Idul Fitri celebrations. However, after these festivities were over, production rates eased due to persistent subdued purchasing power in Indonesia as well as the weak rupiah exchange rate that has depreciated around 7 percent against the US dollar since the start of 2018, thus making imports more expensive.
For stakeholders it will be interesting to see whether wheat imports will rise significantly ahead of the Christmas and New Year celebrations at the year-end. This is the traditional peak season for wheat imports.
Wheat Imports into Indonesia:
(in million tons)