Agriculture in Indonesia

Agriculture

Cocoa

Indonesia’s Cocoa Industry: Lack of Supply Still Hampers Growth and Investment

Indonesia's cocoa industry suffers from the lack of supply amid increasing demand from the downstream sector as the country's cocoa production which once topped global production, is now declining as its cocoa plants age. Despite various constraints, the industry is still attractive in terms of investment.

Indonesia's Booming Cocoa Industry Puts Farmers to the Test

Responding to Indonesians' growing taste for chocolate, global companies have invested heavily in cocoa grinding facilities and downstream businesses in recent years. Farmers, however, are struggling to increase cocoa bean output and have become the weak link in Indonesia's cocoa industry.

New Restrictions on Foreign Ownership of Plantations Proposed – Updated

Shockwaves were sent through Indonesia’s investment community in August as news broke on a new draft bill to limit maximum foreign ownership of plantations to 30%. Though this strict cap was later removed, the plantation bill raises real concerns about its immediate impact on key industries driving economic growth.

Coffee

Indonesia’s Coffee Industry Needs Growth Capital

Indonesia is the world’s third-largest coffee producer and exporter, after Brazil and Vietnam. With per-capita coffee consumption on the rise both in Indonesia and the wider region, there is obvious room for further growth, but there is also an obvious need for investment.

Palm Oil

Indonesian Palm Oil Industry Overview – Biodiesel as a New Source of Revenue Growth

After being neglected for so long despite its strategic position as a key driver of the economy, the Indonesian government under President Joko Widodo has begun to pay more attention to the local palm oil industry through a number of business-friendly regulations.

An Overview of Indonesia’s Palm Oil Industry

Crude Palm Oil is one of Indonesia’s most strategically important sectors, being the leading CPO exporter worldwide. The following analysis of recent industry trends and regulations highlights the opportunities and challenges for investors in Indonesia’s palm oil sector.

Harvest Time for Indonesia’s Fertiliser Industry

With the implementation of government initiatives to achieve food security and promote downstream agribusiness opportunities having placed a renewed onus on the increased production of key commodities; Indonesia’s fertiliser manufacturing industry has experienced steady growth

Incentivising Downstream Investment; A Look into Export Tariffs on Agricultural Commodities

To encourage the development of higher value added activity in the country’s agriculture sector, Indonesia beginning in 2010 initiated several policies limiting the export of unprocessed commodities.

Rubber

Indonesia’s Rubber Industry: Increased Competition and Falling Prices

Recent volatility has once again placed a focus on the sustainability of Indonesia’s rubber industry and the pressing need to make the sector more competitive as well as to develop value added industries that benefit the local market as well as provide goods to the global export market.

Sugar

Indonesia's Sugar Industry Overview: Still a Long Way from Self-Sufficiency

Although it has existed since the Dutch colonial period, the fate of the Indonesian sugar industry is not as sweet as its product. Many issues continue to plague the national sugar industry, ranging from aging factories to a flood of cheap imported sugar due to poor market regulation.

Tea

Indonesia’s Tea Industry: Bitter Supply Amid Sweet Demand

Indonesia’s tea industry faces a number of obstacles from aging plants to climate change that have led to lower productivity and poor profitability which has prompted many smallholders to switch to other commodities. That being said, there has been increased demand for tea in recent years.

Fisheries & Livestock

Beef

Indonesia: Short Beef Supply Spells Long-Term Prospects

Rising personal incomes are making beef more affordable in Indonesia despite high global prices. Industry experts anticipate double-digit growth rates for the beef market in Southeast Asia's largest economy, which opens up attractive opportunities for foreign exporters and investors.

Prodding Indonesia’s Local Cattle Industry

Indonesia’s per capita consumption of beef, which currently stands at just less than 3 kg annually, is expected to hit double digit growth within the next two decades; a significant increase from its present rate of 4.2% (Ministry of Trade) and very much indicative of rising demand for red meat in South East Asia’s largest economy.

Dairy

Indonesia’s Dairy Industry Needs to Scale Up to Meet Local Demand

The country's large market potential and westernising diets in the fast-growing Southeast Asian region could make Indonesia an attractive hub for dairy manufacturing, provided that sufficient raw materials can be sourced from local dairy farms.

Overview of Indonesia’s Dairy Industry

Indonesia’s dairy industry and dairy products industry is undergoing a boom with market demand rising by over 10% on an annual basis for the past ten years due to changing consumer habits and population growth. This section looks at some of the key consumer trends in the industry.

Fisheries

Indonesia's Fisheries Sector: Under a New Paradigm

The Indonesian fisheries sector grew rapidly throughout 2015 under the steam of the Jokowi government’s renewed focus on Indonesia’s competitive advantages within maritime related sectors. The Indonesian government continues to improve its policies in order to enhance the fisheries sector.

Indonesia’s New Maritime Law; A Big Catch for Investors

Indonesia holds the potential to be a major global producer and exporter of fishery and aquaculture products. As part of President Joko Widodo’s maritime centred vision, the country is making strides in curbing illegal fishing and has taken a more emboldened stance on fishery exports.

Other

Horticulture

Indonesia’s Horticultural Sector: Fruitful Opportunities Waiting to be Realised

Indonesia’s horticultural sector continued to witness significant growth in 2015 in terms of the domestic market and local production for export. Local producers also enjoyed strong sales in 2015 following a period of malaise due to the sharp rise in the volume of imported fruits.

Overlooked Opportunities in Indonesia’s Agribusiness Industry

Indonesia has long been unable to take full advantage of its potential as a destination for agribusiness. This stands to change, however, with the government’s initiative to incentivise business activity in downstream agricultural industries.

Wheat

Wheat Gains in Indonesia – Downstream Opportunities on the Rise

Given the ready availability of locally-processed wheat flour supply and the market’s growing taste for bread and noodles, the downstream wheat-based product industry presents opportunities abound for investors.

Indonesia’s Growing Appetite for Wheat

Wheat consumption in Indonesia is growing rapidly, supported by an expanding middle class that has taken a liking to western cuisine. This section looks at the potential of the sector in light of changing consumer habits.

Indonesia Agriculture Snapshot

Contribution to GDP: 13.70% (2016 including Fisheries & Livestock)
Number Employed in the Sector: 46 million (2016)
Main Products: Palm Oil, Palm Kernel, Rubber, Cocoa, Coffee, Tea, Tobacco, Rice, Sugarcane, Maize, Cassava, Tropical Fruits, Spices, Poultry, Fisheries.
Main Export Markets: China, USA, Japan, India, Singapore, Malaysia, Pakistan, South Korea, Italy, Netherlands, Bangladesh, Egypt.
Relevant Law: Presidential Regulation No. 39 of 2014 on the Negative Investment List imposes varying degrees of foreign ownership limitations in plantations depending on the crop type, and Government Regulation No. 98 of 2013 limits private plantations to 100,000 hectares.