ID2025-0006 - Indonesia’s new biofuel roadmap shows the government’s 10-year plan for higher biodiesel blending rates, bioethanol’s inclusion in non-subsidized gasoline, and drop-in biofuels. The roadmap draft also recognizes organic waste as a biofuel feedstock. Although the roadmap shows lofty blending goals for bioethanol, it lacks the additional regulations that provide subsidies to cover the price spread between bioethanol and gasoline like the ones that prop up the biodiesel blend mandate. Without these subsidies, fuel retailers and biofuel producers will remain disincentivized to meet the new bioethanol blend mandates. The roadmap does not address tariff rate reductions for imported bioethanol.

ID2025-0005 - On November 18, 2024, the Government of Indonesia (GOI) issued Regulation No. 19/2024 on the Supervision of Genetically Engineered Food which updates the labeling requirements for genetically engineered (GE) products, and regulates microbial biotechnology, genome editing, and the food safety assessment of products with stacked genes. Specifically, the GOI plans to enforce an existing requirement for processed food products containing at least five percent GE material to be labeled accordingly. This may have little impact on U.S. GE product exports to Indonesia, currently valued at over $2.1 billion, since fresh GE products (e.g., soybeans) and those which have been refined and no longer contain GE DNA/proteins are exempt. To date, no processed food products containing five percent GE materials have been registered with the GOI, and so FAS Jakarta is not aware of any products in commerce in Indonesia that are required to be labeled in accordance with this new regulation.

ID2025-0003 - This report serves as an update to FAS Jakarta’s previous report outlining Indonesia’s plans to impose a 12-percent value-added tax (VAT) for luxury agricultural products (please see GAIN Report ID2024-0053). This would have been a significant change, since agricultural products had not previously been subject to any VAT. Through an official press conference on December 31, 2024, President Prabowo Subianto announced a reversal which effectively means there will be no changes to VAT applications for agricultural goods, although the VAT for certain processed food products previously taxed at 11 percent will remain in place at that rate. Fresh agricultural products that were not previously subject to any VAT will remain exempt.

ID2024-0053 - On December 16, 2024, the Government of Indonesia (GOI) announced the increase in value-added tax (VAT) from the current 11 percent to 12 percent on selected goods and services, effective January 1, 2025. In addition, a separate 12 percent luxury goods sales tax will newly be applied for luxury products intended for high-end Indonesian consumers (luxury VAT). Impacted products include premium beef, pork, fruit, seafood, and specialty rice which historically were not subject to any VAT. Once in force and fully implemented as early as January 2025, the luxury VAT policy will have a significant impact on above-mentioned U.S. agricultural exports to Indonesia, currently valued at approximately $154 million per year. These products already face strong competition from countries such as Australia, New Zealand and the People’s Republic of China which offer competitive prices and have duty-free access or lower tariffs under free trade agreements.

ID2024-0051 - On October 20, 2024, Prabowo Subianto was sworn in as the eighth president of Indonesia, Southeast Asia’s largest economy. During his inauguration, President Prabowo announced he would consolidate and marshal executive and legislative power to build early momentum on his priorities, in particular food self-sufficiency, energy sovereignty, a Free Nutritious Meal Program, and “commodities down-streaming.” To fast-track his flagship Food Estate and school feeding programs, President Prabowo created a new Coordinating Ministry of Food Affairs. This report outlines key appointments within the Prabowo Administration and their priorities for background as imported products fall under increased scrutiny in Indonesia.

ID2024-0050 - The Indonesian milling industry continuously faced significant challenges during 2023/24 which is estimated to continue posing some impact to 2024/25. Slowing demand from export destination countries and fierce competition from cheaper imported products in the domestic market have forced some textile and products manufacturers to take efficiency measures. Indonesian cotton imports and consumption in 2024/25 are forecast to decrease to 1.8 million bales and 1.75 million bales respectively. The declines are due to less demand from the export market and increased competition in the domestic market. Due to lower consumption, cotton ending stocks in 2024/25 are forecast to increase 10.6 percent from 2023/24.

ID2024-0049 - In 2023, the Indonesian foodservice industry was valued at $26.3 billion, a 13 percent increase from the previous year, making it the largest foodservice market in Southeast Asia. Most of the leading foodservice players are American fast-food chains such as McDonald’s, KFC, Pizza Hut, and Starbucks. U.S. food export prospects in this market include cheese, frozen potatoes, beef, fruit, pork, wine, and tree nut products, mostly used by international hotel chains, high-end restaurants, and international fast-food chains.

ID2024-0045 - Indonesia’s 2024/25 wheat imports are forecast to decline 8 percent from 2023/24, when higher demand from feed mills, consumption of wheat flour-based food from major events in early 2024, and demand for cheaper alternatives to rice drove wheat imports up to new record highs. With larger production, rice imports in 2024/25 are expected to fall sharply from 2023/24, when the national logistics agency tendered to offset the smaller crop. Increased corn production in 2024/25 will reduce the volume of imports, although feed and wet milling demand remains strong.

ID2024-0048 - Indonesia’s B40 biodiesel blending mandate program, which is expected to roll out in 2025, is projected to increase palm oil use by 3 percent to 22 million metric tons in 2024/25. Soybean consumption recovered in 2023/24 as soybean retail prices continue to decrease. Weak performance in the feed mill industry reduced 2023/24 soybean meal use lower than previously expected. Due to lower prices, Indonesia’s imports of U.S. soybean meal rose an estimated 43 percent to 167,000 MT in 2023/24.

ID2024-0043 - Indonesia’s National Agency of Drug and Food Control (BPOM) has drafted a new regulation that would mandate the use of a “Nutri-Level” front-of-pack labeling system for sugar, salt, and fat (SSF) content and set maximum SSF levels. Like the system used in Singapore, the proposed grading system would rank products as “A, B, C, and D’’ levels. C and D-level products would be required to display their “Nutri-Level” grade as well as their total SSF content per serving or per package. The first phase would apply to ready-to-drink, non-alcoholic beverages, potentially as early as December 2024. Once in force and fully implemented, this regulation would have a significant effect on U.S. packaged food and non-alcoholic beverage exports to Indonesia - currently valued at approximately $54 million per year. U.S. stakeholders are requested to share comments and concerns with FAS as soon as possible. Please note that the final regulation may be published prior to the January 2, 2025, comment deadline.