INDONESIA – Indonesia is projected to import a record 12.6 million tonnes of wheat in the 2023-24 marketing year, marking a substantial 33% increase from the previous year, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA).
This surge in wheat imports is driven by heightened demand from feed mills, increased consumption of flour-based foods, and a growing preference for wheat as a cheaper staple alternative to rice.
In contrast, the FAS has revised its 2023-24 corn consumption for feed down by 8.5% to 8.6 million tonnes.
This adjustment follows expectations of recovering local corn production and a decline in corn prices. For the 2024-25 marketing year, wheat imports are forecasted to moderate to 12 million tonnes, while corn for feed consumption is anticipated to rise to 9 million tonnes.
The notable rise in wheat imports reflects a broader increase in wheat consumption for both food and feed, with projections estimating 11.3 million tonnes in 2023-24 and 11.7 million tonnes in 2024-25.
The anticipated decrease in wheat demand following recent elections and weakened exchange rates is expected to reduce wheat imports in the 2024-25 marketing year.
The Indonesian Flour Mills Association (APTINDO) reports that domestic rice prices have driven up the consumption of instant noodles, particularly among lower-income families.
Additionally, the burgeoning middle class, including a Generation Z demographic keen on exploring new products, is contributing to increased flour-based food consumption.
The ongoing El Niño phenomenon has impacted corn and rice production in Indonesia. The first cycle of 2023-24 has seen reduced harvested corn area, dropping to an estimated 3.6 million hectares from a previous forecast of 3.7 million hectares.
Consequently, corn production is projected to fall by 1.6% to 12.2 million tonnes from 12.4 million tonnes in 2022-23.
The production shortfalls and high local corn prices, coupled with competitive imported wheat prices, have led to a shift towards higher wheat inclusion in feed formulations and an increased use of other plant-based feed ingredients.
Furthermore, El Niño has also diminished rice paddy harvested area and production, with milled rice output expected to decrease to 32.1 million tonnes from 33.9 million tonnes in the previous year.
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