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).

ID2023-0017 El-Nino weather patterns, which bring less rain than normal, are expected to peak in August to September 2023. Indonesia palm oil consumption is revised up slightly on higher use from the biodiesel industry for 2022/23. Weaker feed industry performance in the first half of 2023 is expected to curb soybean meal demand to 5.65 MMT in 2022/23.

ID2023-0016 Economic slowdowns in Indonesia’s export destination countries curbed Indonesia’s imports and consumption of wheat. Indonesia wheat imports for 2022/23 are estimated to decrease to 9.0 million metric tons (MMT) from 11.23 MMT imported in 2021/22, reflecting slower demand. Indonesia’s total consumption of wheat in 2022/23 is estimated at 9.5 MMT of wheat equivalent, lower than the previous estimate of 9.7 MMT of wheat equivalent. Meanwhile, El Nino is expected to reduce 2022/23 rice production to 52.9 MMT compared to the previous 2022/23 estimate of 53.5 MMT. In anticipation of price fluctuations, state-owned enterprise BULOG will likely fully utilize its food security mandate to import 2.0 MMT of rice in 2022/23.

ID2023-0015 In 2022, the total value of grocery retail sales in Indonesia reached $100 million, a 9 percent increase from the previous year due to the easing of pandemic-related measures. Traditional markets still dominate the retail food and beverage sector, accounting for 77 percent of market share, although they continue to lose market share to modern retail stores and e-commerce. Among modern retail channels, convenience stores make up the largest segment and are expected to continue to grow in number of outlets due to their closer proximity to residential areas and expansion outside of Java Island.

ID2023-0014 Indonesia is a key stakeholder and an active participant at global environmental fora. Home to a vast swathe of rainforest, Indonesia is ranked as the world’s tenth largest emitter of greenhouse gases (GHG), mainly due to land-use change and energy sector emissions. Indonesia is the world’s dominant producer and exporter of palm oil, which is a source of controversy in Indonesia’s environmental debate on the international stage. This report provides an overview of Indonesia’s key international climate change commitments and domestic policies, as well as U.S. government and USDA initiatives to partner with Indonesia on environmental initiatives.

ID2023-0013 State-owned Indonesian energy company Pertamina will launch a new gasoline product containing 5 percent ethanol in late June 2023, utilizing ethanol derived from domestic sugarcane. According to Presidential Regulation 40/2023, Indonesia aims to produce 1.2 billion liters of sugarcane ethanol by 2030. Implementation of an eventual E10 blending mandate nationwide would require an estimated 890 million liters of ethanol per year, equal to 17 percent of total U.S. ethanol exports in 2022.

ID2023-0012 Post forecasts Indonesia coffee production at 9.7 million bags in 2023/24, a decline of 18 percent from the previous year as excessive rainfall disrupted the cherry development stage, lowering yield in major Robusta producing areas. Subsequently, 2023/24 Indonesia green bean exports are projected to decrease 32 percent from the previous year to 5.2 million bags on lower exportable supplies.

ID2023-0011 Private sugar mills expansion leads to increased production in 2022/2023. El Nino, which usually increases sugar content in sugarcane and continues area expansion by private sugar mills is forecast to further increase plantation white sugar production in 2023/24 to 2.6 million metric tons (MMT). Nonetheless, imports of raw sugar are forecast to increase mainly due to higher demand from refineries. In an effort to reduce and stabilize retail prices, the Government of Indonesia (GOI) has issued permits to import 991,000 tons of plantation white sugar in 2022/23.

ID2023-0009 Indonesian cotton imports in 2023/24 are forecast to remain stable at 2.0 million bales assuming spinners will use more inventory on hand before making new purchases. Imports are estimated to decline in 2022/23 to 2.0 million bales compared to 2.577 million tons imported in 2021/22. Sluggish global demand and tight competition in the domestic market from imported used clothing led to lower cotton utilization, increasing 2022/23 ending stocks to 547,000 bales. Ending stocks in 2023/24 are forecast to decline to 539,000 bales due to anticipated marginal increases in 2023/24 utilization to 2.0 million bales.

ID2023-0007 This report modifies the rice consumption, trade, and stocks analysis of the 2023 Grain and Feed Annual for Indonesia in light of new official information. The Government of Indonesia recently announced it would import 2 million metric tons (MMT) of rice by December 2023 in order to fulfil its ongoing distribution program and replenish its emergency stocks in case of natural disasters and other needs. Post revises up 2022/23 rice imports to 1.75 MMT and 2023/24 forecasted rice imports to 800,000 MT.

ID2023-0008 Indonesia currently imports 65 percent of the raw materials needed for its growing food processing industry. In 2022, exports of U.S. agricultural products to Indonesia increased by nine percent largely due to higher demand for soybean, dairy and beef. Top U.S. agricultural exports include soybeans, feeds and fodders, cotton, dairy, corn, wheat, fresh fruits, and beef and beef products.

ID2023-0006 High commodity prices in the international market during the last term of 2022 are expected to impede the growth of 2022/23 Indonesian wheat imports and curb the use of wheat in feed formulation. The removal of most COVID-19 restrictions is expected to lead to improved consumer spending. Therefore, consumption of wheat and corn for Food, Seed and Industrial in 2022/23 and 2023/24 are forecast to increase. Forecasts of an early and longer dry season in 2023 will provide for better corn production while posing threats to paddy production which requires more water than corn.

ID2023-0005 Indonesia palm oil production for 2023/24 is forecast at 46 million metric tons (MMT), an increase of 3 percent from the previous year. Weather agencies are forecasting a developing El Nino weather pattern in the second half of 2023 that might bring on severe dryness. Soybean imports are expected to rise to 2.65 MMT for 2023/24 on continued rising demand from the soy-based food industry.

ID2023-0004 On February 6, the Government of Indonesia (GOI) announced it would suspend two-thirds of palm oil exports in order to shore up domestic cooking oil supplies ahead of Ramadan and Eid festivities. The GOI has set a target of increasing domestic cooking oil supplies by 50 percent. A projected 400,000 to 800,000 metric tons (MT) of Indonesian palm oil are expected to be blocked from the global market over the next three months.

ID2023-0002 Indonesia 2022/23 palm oil consumption is expected to rise to 19.4 million metric tons (MMT) on increased use for biodiesel production, as the Government of Indonesia (GOI) rolls out higher blending rates for its 2023 mandatory biodiesel blending program. The GOI is considering extending its soybean subsidy program into 2023, which would continue to impact the soybean market.