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).

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.