Indonesia has always been one of the largest wheat importers in the world. The country’s dependence on wheat has increased significantly over the last decade. In 2018, Indonesia imported more wheat than ever before. This article will discuss the reasons behind the increase in wheat import and its impact on the Indonesian economy.
Why Indonesia Imports Wheat?
Indonesia’s population has been growing at a rapid pace. The country is home to more than 260 million people, and this number is expected to reach 300 million by 2030. As the population grows, so does the demand for wheat-based products such as bread, pasta, and noodles.
Indonesia also has a large and growing middle class. As people’s incomes rise, they tend to consume more wheat-based products. The country’s urbanization has also contributed to the increase in wheat consumption. City dwellers have a more hectic lifestyle and tend to consume more convenient foods, which are often made from wheat.
Indonesia’s Wheat Import Trend
In 2018, Indonesia imported more than 12 million tons of wheat, up from 11.5 million tons in 2017. The country’s wheat imports have been steadily increasing over the last decade. In 2010, Indonesia imported only 6.7 million tons of wheat, which means that the country’s wheat import has doubled in just eight years.
The increase in wheat import has made Indonesia one of the largest wheat importers in the world. The country now ranks sixth in terms of wheat import, behind Egypt, China, Algeria, Turkey, and Brazil.
Impact on the Indonesian Economy
The increase in wheat import has both positive and negative impacts on the Indonesian economy. On the positive side, wheat import has created jobs in the food processing industry. The industry employs millions of people, from farmers to factory workers.
Wheat import has also contributed to food security in Indonesia. The country’s domestic wheat production is limited due to unfavorable weather conditions. Therefore, the country depends on imports to meet its wheat demand.
On the negative side, wheat import has contributed to the country’s trade deficit. Indonesia spends more than $3 billion annually on wheat import, making wheat one of the most significant contributors to the country’s trade deficit.
Wheat import also makes Indonesia vulnerable to global wheat price fluctuations. The country’s domestic wheat price is determined by global market prices, which can be volatile. Therefore, wheat import makes Indonesia’s food prices vulnerable to global market shocks.
Conclusion
Indonesia’s wheat import has been increasing steadily over the last decade, and this trend is expected to continue in the future. Indonesia’s dependence on wheat has both positive and negative impacts on the Indonesian economy.
Therefore, it is essential for the Indonesian government to diversify its food sources and promote domestic food production to reduce its dependence on wheat import. By doing so, the country can improve its food security, reduce its trade deficit, and make its food prices more stable.
