Indonesia Agribusiness Report

Providing expert analysis, independent forecasts and competitive intelligence on the agribusiness industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, Supply & Demand Forecasts, Commodity Price Analysis and Company Profiles.

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Indonesia Agribusiness Report
Product Price
$1,295.00

BMI View: Indonesia's agriculture holds a great amount of promise and sub-sectors such as livestock, sugar and palm oil will experience significant growth opportunities . However, t h e country's goal to become self- sufficient in a large number of commodities is overly ambitious in light of the robust outlook for food and drink consumption. Agricultural production will struggle to expand in the coming years amidst scarce agricultural land, the lack of proper infrastructure and the existence of a large number of low-technology, small-scale farmers. While we believe that Indonesia will be able to reduce its dependence on rice imports in the coming years, sugar, corn and beef self-sufficiency are far-fetched.

Self-Sufficiency Goal Not Always Achievable
Indonesia - Select Commodities Self-Sufficiency Ratios (%)
f = BMI forecast. Source: USDA, FAPRI, OECD-FAO, BMI

BMI Key Forecasts

  • Cocoa production growth between 2014/15 and 2019/20: 3.1% to 335,000 tonnes. Production growth will slightly accelerate from 2018 onwards, as private grinders are slowly developing programmes to improve plantation management and foster best practices. Until then output will see weak growth.

  • Palm oil consumption growth between 2015 and 2020: 46.7% to 11.0mn tonnes. Relatively recent refining and biodiesel policies will continue to inflate domestic consumption of palm oil in the coming years.

  • Sugar production growth between 2014/15 and 2019/20: 18.9% to 2.5mn tonnes. The strong growth rate is mainly due to base effects, as production declined in 2014/15. Moderate expansion in plantations, improved yields and higher sucrose content in cane will drive growth. However, it will be held back by poor cane recovery rates, harvest management and infrastructure issues.

  • BMI universe agribusiness market value: USD145.8 in 2017 (up from USD138.9 in 2016; forecast to grow annually by 6.4% on average between 2016 and 2020).

  • 2017 real GDP growth: 5.7%, up from 5.2% in 2016 and compared with the 2011-2015 year average growth of 5.5%; forecast to grow annually by 5.8% on average between 2016 and 2020.

  • 2017 consumer price index: 4.4%, up from 3.6% in 2016 and compared with the 2011-2015 year average growth of 6.0%; forecast to grow annually by 4.6% on average between 2016 and 2020.

Latest Updates & Structural Trends

Indonesia's long-standing goal to reach self-sufficiency for a number of key foodstuffs will remain elusive in the coming years as production expansion is constrained by structural deficiencies. As such, the government will have little choice but to ease the import restrictions it maintains on corn and sugar, gradually allowing more imports in the coming years.

=After 15 years of robust growth in palm oil production, consumption and company earnings, Indonesia's palm oil sector is going through challenging times. Regulatory pressure is mounting, the growth rate of planted area is slowing down and palm oil prices have been low for over two years. Domestic palm oil consumption is also evolving, as Indonesia is aiming at boosting biodiesel use in the coming years. Although we believe the government will fail to fill-in the B15 mandate it is looking at, changes in biofuel policy will support consumption.Prospects for South East Asia's palm oil production in 2015/16 have worsened in recent months and we now forecast output to decrease by a greater amount than a few months ago. El Nino (May 2015-May 2016) ended up being one of the strongest on records and led to two long waves of dry weather in South East Asia (August-October 2015 and January-April 2016). As a result Indonesia's palm oil production declined for the first time since 1997/98 in the 2015/16 season (which ended in September 2016). We have revised down our estimate and believe output contracted by 2.0% to 32.3mn tonnes, compared with a previous forecast of 32.9mn tonnes.Indonesia's production will pick up strongly in 2016/17 due to the return of more normal yields. However, the slowdown in Indonesia's palm oil production growth recorded over the past 5 years - due to growing constraints to plantation expansion and lower palm oil prices - will resume in the medium term.Environmental and labour right issues around palm oil production will continue to make the headlines in the coming months, putting increasing pressure on large producers to adopt more sustainable - and costly -practices. However, the implementations of stricter regulations (on deforestation for example) will take years to be developed as the Indonesian government is willing to protect small holders who represent 40% of the country's production.For 2016/17, we forecast rice production to grow by 1.5% y-o-y to 36.5mn tonnes due to more favourable weather and higher yields. More specifically, higher precipitation levels will support rice production through the country's three crop cycles October-February, March-June and July-October. This contrasts with rice being predominantly grown during the first cycle when rainfall is at its average rate.

The country's corn production deficit will grow and reach 3.5mn tonnes in 2015/16, compared with the five-year average deficit of 2.5mn tonnes. The situation will worsen over the next five years, with the corn deficit reaching 5.6mn tonnes by 2019/20.

BMI Industry View
7
SWOT
10
Agribusiness
10
Industry Forecast
12
Rice Outlook
12
Latest Updates
12
Table: Indonesia - Rice Production And Consumption Outlook
12
Table: Risks To Outlook
13
Structural Trends
13
Table: Rice Production & Consumption (Indonesia 2012-2020)
16
Grains Outlook
17
Latest Updates
17
Table: Indonesia - Grains Production & Consumption Outlook
18
Table: Risks To Outlook
18
Structural Trends
18
Table: Grains Production & Consumption (Indonesia, 2012-2020)
22
Sugar Outlook
23
Latest Updates
23
Table: Indonesia - Sugar Production And Consumption Outlook
23
Table: Risks To Outlook
24
Structural Trends
24
Table: Sugar Production & Consumption (Indonesia 2012-2020)
27
Livestock Outlook
28
Latest Updates
28
Table: Indonesia - Livestock Production & Consumption Outlook
29
Table: Risks To Outlook
29
Structural Trends
29
Table: Livestock Production & Consumption (Indonesia 2012-2020)
34
Coffee Outlook
36
Latest Updates
36
Table: Indonesia - Coffee Production & Consumption Outlook
36
Table: Risks To Outlook
36
Structural Trends
37
Table: Coffee Production & Consumption (Indonesia 2012-2020)
40
Cocoa Outlook
41
Latest Updates
41
Table: Indonesia - Cocoa Production And Consumption Outlook
41
Table: Risk To Outlook
42
Structural Trends
42
Table: Cocoa Production & Consumption (Indonesia 2012-2020)
46
Palm Oil Outlook
47
Latest Updates
47
Table: Indonesia - Palm Oil Production And Consumption Outlook
48
Table: Indonesia - Risks To Palm Oil Outlook
48
Structural Trends
49
Table: Indonesia - Minimum Wage ('000 IDR) & Palm Oil Production By Province, 2012-2016
52
Table: Palm Oil Production & Consumption (Indonesia 2013-2020)
54
Commodities Price Analysis
55
Global - Global Commodities Strategy
55
Table: SELECT COMMODITIES - PERFORMANCE AND BMI FORECASTS
55
Upstream Analysis
57
Asia GM Outlook
57
Table: Selected Countries - GM Crops Use (mn hectares)
61
Asia Machinery Outlook
63
Table: Select Countries - Average Size Of Farms, Hectares
68
Asia Fertiliser Outlook
70
Downstream Analysis
76
Food
76
Latest Updates
76
Structural Trends
77
Table: Food Sales (Indonesia 2015-2020)
79
Regional Overview
82
Competitive Landscape
88
Table: Major Agribusiness Companies
88
Demographic Forecast
89
Demographic Outlook
89
Table: Population Headline Indicators (Indonesia 1990-2025)
90
Table: Key Population Ratios (Indonesia 1990-2025)
90
Table: Urban/Rural Population & Life Expectancy (Indonesia 1990-2025)
91
Table: Population By Age Group (Indonesia 1990-2025)
91
Table: Population By Age Group % (Indonesia 1990-2025)
92
Methodology
94
Industry Forecast Methodology
94
Sector-Specific Methodology
95

The Indonesia Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.

BMI's Indonesia Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.

Key Benefits

  • Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
  • Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
  • Assess the activities and market position of your competitors, partners and clients.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.

BMI Supply & Demand Forecasts

Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.

  • Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
  • Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
  • Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
  • BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.

BMI’s Commodity Price Analysis

Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.

Downstream Analysis

Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.

Featured Analysis

Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.

Competitive Landscape

The reports contain information on prominent companies operating in each market.

Key Commodities Covered By The Agribusiness Market

Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean

Please note – not all reports cover all commodities.

Sources

The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.