INDONESIA GRAIN MARKET

Indonesia grain market is estimated to see a robust CAGR in the forecast years fueled by a growing population and rising rice consumption along with government’s free meal program to students.

Major Market Drivers and Emerging Trends

Indonesia grain market size is growing mainly owing to its rising population which exceeds 281 million people that leads to greater food demand. Consequently there is an increasing demand for grains like rice which is a main staple food for the large population. The country consumes nearly 31 million tons of rice annually which averages 93.5 kg per person each year. Even though rice is widely consumed across the country, Indonesia continues to import it. However, initiatives are being rolled out to halt imports. The most recent data from BPS indicates a significant double digit growth in rice production which potentially enables Indonesia to end its reliance on imports.

Another factor supporting the Indonesia grain market growth is the government efforts to offer free meals. This nationwide program seeks to strengthen Indonesian future workforce by boosting child nutrition and fostering improved educational performance. The program targeted nearly 83 million people with nutritious meals which further boosts demand for grains like rice. The free lunch initiative always includes rice even though several schools have experimented with incorporating sweet potatoes. To run its free meal program the government estimates that the country needs at least four million tonnes of rice.

The demand for grains is also rising driven by their use in animal feed. In the Indonesian animal feed market, wheat and corn make up the primary ingredients with 90% going to poultry and 6% to aquaculture along with 4% to cattle and swine. Chicken meat consumption in Indonesia is around 8.2 kg per capita annually. The growing poultry consumption and better economic conditions make wheat and corn essential raw materials in animal feed which supports the increasing need for affordable protein.

The government is considering wheat import as corn substitute in animal nutrition to maintain stability in domestic demand. Since wheat is not cultivated in the country Indonesia meets its entire demand through imports. The government previously imported corn for use in animal feed production but now plans to substitute it with wheat because there is high domestic corn production. This policy change is essential to avoid building up excessive corn supply.

There is also a clear trend toward organic grains which reflects changing consumer preferences. There is a growing demand among consumers for clean label foods that contain no synthetic chemicals. Consumers appreciate the natural flavor along with nutritional benefits and environmental sustainability which organic grains provide. Organic farming meets this rising demand while also offering numerous environmental advantages. By avoiding chemical pesticides organic farming supports soil health and encourages a more balanced ecosystem. This has led agribusinesses to recognize organic farming to be a pathway to profitability and sustainable practices.

Despite its benefits grain farming also contributes to greenhouse gases where burning rice straw in the fields after harvest leads to major air quality issues. Rice cultivation also requires extensive water resources and frequently relies on chemical inputs which harm the environment while posing health risks to farmers. The excessive water consumption for grain farming depletes fresh water available for human use and various other purposes which leads to more intense water conflicts. Grain production is also becoming increasingly costly driven by rising labor expenses along with higher fertilizer prices and expensive machinery maintenance.

Indonesia Grain Market by Grain Type Insight

Based on type, rice holds significant importance in Indonesia. The FAO reports that Indonesia ranks as the seventh biggest rice consumer globally. Rice is consumed by over 90% of Indonesians with relatively equal consumption rates across provinces and income levels which makes it an excellent option for food fortification. Wheat is also becoming an increasingly important component in stockfeed formulations. Wheat contains more protein than corn which makes it among the top cereals for animal feed.

Indonesia Grain Market by Production Method Insight

Based on production methods, conventional farming remains dominant even though organic practices are steadily gaining traction. Organic farming has attracted increasing attention owing to its advantages in providing healthier food and restoring land quality. The challenge is that the land for organic farming requires certification from the National Standardization Agency and farmers are responsible for the certification fees.

Indonesia Grain Market by End-Use Insight

Based on end use, grain is primarily used for food & beverages and animal feed. Most Indonesians include rice in their daily diet with corn also being widely consumed and processed into various products. Corn and wheat are also crucial ingredients in animal feed because they are ideal protein sources. Furthermore corn is an excellent biofuel feedstock because its high starch content allows for efficient conversion into ethanol.

Top Market Players

Several leading market players include Cargill Indonesia, Surya Grain, Sumber Roso Agromakmur, Louis Dreyfus Company among others.

Key Developments

• • In 2024, grain exports from Russia to Indonesia saw a 22% growth in volume and future agricultural collaboration is anticipated to involve grains and livestock products.

Segments covered in the Report:

The Indonesia Grain Market has been segmented on the basis of Grain Type, Production Method, and End Use. Based on Grain Type, the market is segmented into Wheat, Rice, Corn, Barley, Oats, and Others. Based on Production Method, the market is segmented into Conventional and Organic. Based on End Use, the market is segmented into Food and Beverages, Animal Feed, Biofuels, and Others.

Market Segmentation

Indonesia Grain Market by Grain Type

• • Wheat
  • Rice
  • Corn
  • Barley
  • Oats
  • Others

Indonesia Grain Market by Production Method

• • Conventional
  • Organic

Indonesia Grain Market by End Use

• • Food and Beverages
  • Animal Feed
  • Biofuels
  • Others

Indonesia Grain Market Leading players

• • Cargill Indonesia
  • Surya Grain
  • Sumber Roso Agromakmur
  • Louis Dreyfus Company