ID2023-0033 Although Indonesian dairy production is still reeling from the 2022 Foot and Mouth Disease (FMD) outbreak, imports of dairy ingredients are expected to decline in 2023. Dairy importers are reporting a 10 to 20 percent drop in demand in 2023 due to a multitude of factors, including problems obtaining import recommendations and licenses, decreased consumer purchasing power, and election uncertainty. Post estimates Indonesia’s total dairy consumption in 2022 and 2023 at 4.22 and 3.7 MMT respectively. Dairy consumption in 2024 is anticipated to rebound to 4 million metric tons as post-election economic conditions are expected to stabilize.

ID2023-0028 Indonesia palm oil production for 2023/24 is revised down slightly to 45.8 million metric tons (MMT) due to lower yields from El Nino-induced dryness. Soybean consumption for 2022/23 is revised down on slower demand from the food sector. Reduced use of soybean meal in 2022/23 is driven by weak feed mill performance, mainly on higher production costs.

ID2023-0029 Economic slowdowns in Indonesia’s export destination countries negatively affected its imports and consumption of wheat. Wheat imports for 2022/23 are revised down to 9.446 million metric tons (MMT) from the previous estimate of 9.526 MMT, reflecting slower demand from both domestic and export markets. Total 2022/23 wheat consumption is estimated to decline to 9.6 MMT of wheat equivalent from 10.5 MMT the previous marketing year. As for rice, due to prolonged, El Nino-induced dryness, Indonesian 2022/23 paddy production is revised down to 53.1 MMT from the previous estimate of 53.5 MMT. Anticipating price fluctuations in 2023/24, the Government of Indonesia assigned state-owned enterprise BULOG to import another 1.5 MMT of rice to be carried out in 2024.

ID2023-0022 President Jokowi stated his support for the utilization of genetically engineered (GE) crops (i.e., soybeans) in his September 2022 speech. To date, ten GE events have been allowed for cultivation in Indonesia (i.e., one GE sugarcane, one GE potato, and eight GE corn varieties).

ID2023-0027 On September 26, 2023, U.S. Ambassador Sung Y. Kim participated in the opening of one of the largest tempeh exporting factories in the world located in Bogor, Indonesia. This new factory, belonging to Tempe Azaki, will increase the company’s current production capacity of tempeh to 50 metric tons a day. Tempe is a traditional Indonesian food staple made mostly of yellow soybeans imported from the United States. This event illustrated the importance of international trade and U.S. capacity building and the success of transforming a microenterprise into an industrial-scale, food exporter. Tempe Azaki, which has been trained by the U.S. Soybean Export Council (USSEC), utilizes almost exclusively U.S. soybeans in its manufacturing process to export its tempeh products to international markets, including the United States.

ID2023-0026 Indonesia’s lower Robusta coffee production is expected to cut coffee bean exports by 35 percent to 5 million bags in 2023/24, which has already caused a surge in imports in the first half of the marketing year. Higher Robusta prices are expected to dampen domestic consumption.

ID2023-0025 The El Nino climate pattern is expected to reduce Indonesia's 2022/23 rice and corn production. Post estimates Indonesia's 2022/23 corn production to decline to 12.3 million metric tons (MMT) compared to the previous estimate of 12.9 MMT. Production shortages are expected to result in soaring corn prices. On October 11, 2023, the National Food Agency (NFA) authorized the government-owned National Logistics Agency (BULOG) to import a total of 500,000 metric tons of feed corn to soften the impact of higher commodity prices and ensure adequate supplies for small holder poultry farmers.

ID2023-0020 On September 26, 2023, the Government of Indonesia (GOI) announced it will authorize the importation of an additional 2 million metric tons (MMT) of rice to offset rice production shortfalls and bring down rice prices. BULOG, a state-owned logistics company, reported its 2022/23 ending stocks risk falling below food security levels. BULOG has been periodically releasing its government rice reserves stocks to dampen skyrocketing rice prices due to El Nino-induced rice production shortages, but now needs to replenish those stocks with imports. Approximately 1 MMT of this new import allocation must arrive before the end of 2023 to keep BULOG’s stocks from being fully depleted, while the remaining 1 MMT are expected to arrive in early 2024.

ID2023-0019 In 2022, the Indonesian foodservice industry was valued at $29 billion, an almost 30 percent increase from the previous year, making it the largest foodservice market in Southeast Asia. The value of food service sales rebounded in 2022 but fell short of reaching pre-pandemic levels. 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, fruits, pork, wine, and tree nut products, mostly used by international hotel chains, high-end restaurants, and international fast-food chains.

ID2023-0018 The introduction of E5 gasoline in July 2023 restarted Indonesia’s bioethanol consumption after years of inactivity, albeit to a modest start of an estimated 2 million liters for 2023 due to E5’s price premium in a price sensitive market. Meanwhile, Indonesia’s new B35 biodiesel blending mandate reached nationwide coverage in August 2023 and is expected to raise biodiesel consumption 25 percent to 13 billion liters. The government of Indonesia (GOI) continues to carry out tests for renewable diesel (HDRD) and sustainable aviation fuel (SAF).