Feed and food growth fuel Indonesian wheat demand: USDA

Population growth, shifting patterns of consumption, and growing industrial consumption have put Indonesia on course to become the world’s biggest wheat buyer in the 2017/18 marketing year, data from the USDA showed.

“Indonesia’s imports are raised 1 million tons to 12.5 million on increases for both food and feed use,” the USDA said in its February WASDE report released Thursday.

Black Sea sales have made some of the biggest year-on-year inroads into the Indonesian market, a destination traditionally dominated by Australian exporters.

“Imports from Ukraine have surpassed those of Australia, a long-time top supplier of wheat to Indonesia with market share of around 50% or more… Not only is Ukraine robbing Australia of its major market, Russia has now made an entrance into Indonesia,” the USDA said separately.

The most recent data from Ukraine shows sales up 23% to 1.65 million mt, while Russian sales are more than four times higher at 979,000 mt.

But it is not just the Black Sea which has seen higher sales, with the most recent data from major exporters showing a marked year-on-year increase in volumes shipped to Indonesia this year.

The latest export sales data from the US shows exports are up 57% year-on-year at 1 million mt, while Argentinian exports up 65% to 119,023 mt.       

Data from the Indonesia ministry of statistics shows just over 5 million mt of wheat was imported in the first five months of the 2017/18 marketing year.

It marks a turnaround from midway through 2017 when the Indonesian government was attempting to limit the import of feed grade grains in a bid to boost its domestic corn sector.

Indonesia replaces Egypt as the world’s biggest wheat buyer, a title it held for more than a decade.