Indonesia Grain and Feed Update of the U.S. Department of Agriculture (USDA) provided significant data on one of the world’s biggest wheat importers. Based on recent trade data, 2017/18 wheat imports are estimated lower at 10.516 million tons compared to the previous estimate of 12.0 million tons, USDA said. The reduction is primarily due to a weakening rupiah hindering imports . Wheat imports for 2018/19 are forecast to remain at 10.5 million tons.
According to report, the wheat milling industry is estimated to have grown by five percent in 2017/18. Relatively lower prices for wheat flour and wheat flour-based food compared to rice are shifting consumption away from the Indonesian staple. The Indonesian Flour Mills Association (APTINDO) further projects that the total installed capacity of Indonesian flour mills will reach approximately 14.2 million tons by 2024/25. According to the Global Trade Atlas, in 2017/18, wheat flour imports declined by 40 percent to 50,507 tons of wheat equivalent, compared to 84,377 tons of wheat equivalent imported in 2016/17. The decline is mainly due to the continued weakness of the rupiah against the U.S. dollar. Domestic flour will continue to dominate the market throughout 2017/18 with a 98.9 percent market share. According to Global Trade Atlas data, Turkey held the largest market share of wheat flour exports to Indonesia (52.15 percent), followed by the Romania (18.2 percent), South Korea (11.57 percent), and Canada (5.59 percent) in 2017/18. Indonesia is heavily dependent on imports of wheat as the domestic production of grains is close to zero because the local climate does not suit such cultivation.