Indonesia Agribusiness Report Q4 2010
Business Monitor International, July 2010, Pages: 65
Business Monitor International's Indonesia Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Indonesia's agribusiness service.
BMI View: Despite government initiatives to increase investments, many Indonesian agricultural sectors underperform compared to both global and regional peers. Much of the inefficiency comes from the poor infrastructure, which will remain a challenge given the geographic nature of the country. We expect production across all sectors to increase over the forecast period due to increased domestic demand, government goals of self-sufficiency and export opportunities. However, disease concerns in the livestock sector and the greater scarcity of arable land remain salient risks.
Key Views
- Rice production growth to 2013/14: 11.6%. Government initiatives to replace ageing trees will see an increase in yields as well as planted area, allowing Indonesia to compete with Ghana, the world's second largest producer.
- Poultry consumption growth to 2014: 36.1%. This will come from a combination of increased domestic demand and government initiatives aimed at not only making the country selfsufficient, but also allowing it to become a major regional exporter.
- Sugar production growth to 2013/14: 39.3%. This expansion will come mainly through improved yields and sucrose content in cane. Despite the production improvement, the country will likely remain, along with India and the EU, one of the world's largest sugar importers.
- 2010 Real GDP Growth: 5.2% (up from 4.5 in 2009; predicted to average 5.7% from now until 2014).
- Consumer Price Inflation: 5% y-o-y in June 2010 (down from 3.6% y-o-y in June 2009).
Key Industry Developments
- A further expansion of agriculture in Indonesia's outer islands is necessary if the country is to meet the food needs of its massive population, we expect this project to face many difficulties before it becomes a reality. This will be difficult given the pervasive infrastructure deficiencies in most of the country outside of Java. There will be considerable opposition from environmental groups both at home and abroad, as has already happened with the palm oil sector.
- We have revised down our forecast for sugar production in 2009/10 as dry weather followed by unusually heavy rains in Java are expected to delay the start of the cane harvest and see sugar content fall. We now forecast Indonesia to produce 2.77mn tonnes of sugar, down from a previous forecast of 2.92mn tonnes. This leaves the country a long way from meeting domestic demand, which we forecast to rise to 4.48mn tonnes in 2009/10. The government is implementing trials of tropical sugar beet production as part of its plan to reach self-sufficiency in sugar, although self-sufficiency will still be many years away.
- In an attempt to bolster the domestic grinding industry, the government placed a tax on cocoa bean exports in April 2010. Groups representing cocoa growers believe the new tariff will see a large loss of income for farmers. Although we expect high cocoa prices and government investment to help increase output over the forecast period, the continuation of the tax could see production growth ultimately stall. This is due to diminished incentives to expand domestic output given that domestic processing is inefficient and costly, and the export tax reduces profit margins.
Executive Summary
SWOT Analysis
- Indonesia Agricultural SWOT
- Indonesia Political SWOT
- Indonesia Economic SWOT
- Indonesia Business Environment SWOT
Industry Forecast Scenario
Indonesia Livestock Outlook
- Table: Indonesia – Poultry Production, Consumption & Trade
- Table: Indonesia – Pork Production, Consumption & Trade
- Table: Indonesia – Beef & Veal Production, Consumption & Trade
- Table: Indonesia – Poultry Production, Consumption & Trade
- Table: Indonesia – Pork Production, Consumption & Trade
- Table: Indonesia – Beef & Veal Production, Consumption & Trade
Indonesia Sugar Outlook
- Table: Indonesia – Sugar Production, Consumption & Trade
- Table: Indonesia – Sugar Production, Consumption & Trade
Indonesia Coffee Outlook
- Table: Indonesia – Coffee Production & Consumption
- Table: Indonesia – Coffee Production & Consumption
Indonesia Cocoa Outlook
- Table: Indonesia – Cocoa Production & Consumption
- Table: Indonesia – Cocoa Production & Consumption
Indonesia Grains Outlook
- Table: Indonesia – Corn Production, Consumption & Trade
- Table: Indonesia – Corn Production, Consumption & Trade
Indonesia Dairy Outlook
- Table: Indonesia – Milk Production, Consumption & Trade
- Table: Indonesia – Butter Production, Consumption & Trade
- Table: Indonesia – Cheese Production, Consumption & Trade
- Table: Indonesia – Whole Milk Powder Production, Consumption & Trade
- Table: Indonesia – Milk Production, Consumption & Trade
- Table: Indonesia – Butter Production, Consumption & Trade
- Table: Indonesia – Cheese Production, Consumption & Trade
- Table: Indonesia – Whole Milk Powder Production, Consumption & Trade
Indonesia Rice Outlook
- Table: Indonesia – Rice Production, Consumption & Trade
- Table: Indonesia – Rice Production, Consumption & Trade
Competitive Landscape
- Table: Agricultural Commodity Producers & Traders
- Table: Agribusiness Suppliers
- Table: Integrated Agricultural Producers
Commodity Price Analysis
- Grains Update
- Corn
- Rough Rice
- Soybean
- Wheat
- Softs Update
- Cocoa
- Coffee
- Milk
- Sugar
- Downstream Supply Chain Analysis
Industry Forecast Scenario
- Hot Drinks
- Table: Tea And Coffee Value Sales -- Historical Data & Forecasts
- Alcoholic Drinks
- Table: Alcoholic Drink Value Sales -- Historical Data & Forecasts
- Soft Drinks
- Table: Soft Drink Value Sales -- Historical Data & Forecasts
- Food Consumption
- Table: Food Consumption Indicators - Historical Data & Forecasts
- Canned Food
- Table: Canned Food Value/Volume Sales -- Historical Data & Forecasts
- Confectionery
- Table: Confectionery Value/Volume Sales -- Historical Data & Forecasts
- Trade
- Table: Indonesia Food & Drink Trade Indicators -- Historical Data & Forecasts
- Macroeconomic Forecast
- Table: Indonesia - Economic Activity, 2007-2014
- Industry Trend Analysis
BMI Forecast Modelling
- How We Generate Our Industry Forecasts
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