Exports of Indonesian fruit rose 6.13 percent year-on-year (y/y) to 325,236 tons in the first quarter of 2018 amid strengthening global demand for tropical fruit, specifically growing demand for mangosteen, bananas and pineapples. Largest demand for Indonesian fruit stems from China, Japan, Singapore, Australia and the United States (USA).
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Today's Headlines Horticulture
With the start of the ASEAN Economic Community (AEC) in 2016, Indonesia has to face tougher competition for its fruits exports. The AEC entails a high degree of free trade among its member nations and therefore competition for tropical fruit exports increases, not only in export markets in other parts of the ASEAN region but also on Indonesia's domestic market. Kafi Kurnia, Head of the Indonesian Export-Import of Fresh Fruit and Vegetable Association (Assibisindo), stated that, despite the great potential, Indonesia's fruit export volume remains small. The government is to blame as it fails to turn fruit into a key export commodity.
Indonesia Investments has added the preliminary company profile of PT BISI International Tbk to our Indonesian Companies section. BISI International - together with its three subsidiaries Multi Sarana Indotani, Tanindo Subur Prima and Tanindo Intertraco - is the largest producer of hybrid seeds for corn, rice and horticulture in Indonesia. BISI International is also a major Indonesian producer of pesticides and a distributor of fertilizer. Its plants are located in Kediri (East Java) and head office in Sidoarjo (East Java).
Indonesia's central bank (Bank Indonesia) expects that Indonesia's inflation rate in August will reach about 1.3 percent (month to month), implying that the annual inflation rate will exceed 8.9 percent (year on year) in the same month. Prices of several commodities and horticultural products are still not showing a decrease in prices. These products include beef, chicken meat and onions. Thus, Bank Indonesia requests that the central and regional governments take great care in safeguarding the country's food supplies.
According to data released by Statistics Indonesia (Badan Pusat Statistik, abbreviated BPS), a non-departmental government institution, Indonesia's inflation figure eased 0.03 percent (month-to-month) in May 2013. The Head of BPS, Suryamin, said that it was the first time since ten years that the country experienced deflation in the month of May. The deflation figure is particularly triggered by the government's policy to allow for more imports of certain food products (such as onions, garlic, tomatoes, and chili).
Latest Columns Horticulture
The climate of Indonesia is well-suited for growing various sorts of (tropical) fruit. According to information from Indonesia's Agriculture Ministry, there are 60 types of fruit that have the potential to grow in Indonesia. One of these fruits is the durian. The durian fruit, native to Southeast Asia, is regarded the "king of fruits" due to its distinctive (large) shape and rich flavor (although some dislike the taste). Durian is also known as being the smelliest fruit in the world due to its distinctive (read: awful) smell.
The Indonesian government's decision to limit foreign ownership in the horticulture sector to a maximum of 30 percent (through Law No. 13/2010 on Horticulture), from 95 percent previously, continues to cause a polemic as such protectionism may be a big disadvantage to the development of Indonesia's horticulture sector. Moreover, the law works retroactively implying that existing companies owned by foreign investors need to divest their majority ownership interests. In Law No. 13/2010 foreigners were given four years to divest their shares.
Although the United States continues its traditional focus on direct investments in developed countries, primarily in Western Europe, there has been a significant rise in US investments in Indonesia in recent years. Whereas US investments in the developed economies of Western Europe is mostly found in the financial sector and through holding companies, in developing Asia, the US is more focused on the manufacturing sector due to lower production costs. In the last two years, the US emerged as the second-largest investor in Indonesia after Japan.
With fertile soils and supportive climatic conditions, production of horticultural products (such as fruits, vegetables, or herbal medicines), should be thriving in Indonesia. In reality, however, Indonesia's horticultural production has not been able to meet domestic demand of Indonesia. Various factors lay behind this situation. But in essence it comes down to a lack of productive farmers, while demand has risen steadily. In this given situation, horticultural products should be imported. If not, prices will rise significantly.
Associated businesses Horticulture