THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY

USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT

POLICY

Date:

GAIN Report Number:

Approved By:

Prepared By:

Report Highlights:

The dry season is arriving later than average throughout Indonesia, thus allowing the expansion of third

cycle crop plantings on unirrigated lands. Considering increased corn plantings due to the late dry

season as well as an increase in downy mildew incidents, Post’s corn production numbers remain

unchanged. Likewise, increased rice plantings are offset by the arrival of brown hopper infestations. As

a result, Post’s rice production estimate remains unchanged. Post raises its MY 2016/17 Indonesian

wheat feed and residual consumption estimate to 1.8 MMT, based on growing feed wheat demand

resulting from Indonesia’s refusal to issue corn import licenses.

Thom Wright, Sugiarti

Meylinah

Thom Wright

Indonesia Grain and Feed Update July 2017

Grain and Feed Update

Indonesia

ID1719

7/27/2017

Required Report - public distribution

Post:

SECTION I. SITUATION AND OUTLOOK

The Indonesian Meteorology, Climatology, and Geophysics Agency (Badan Meteorologi, Klimatologi,

dan Geofisika, BMKG) reported that Indonesia was hit by a strong La Nina in 1998, a strong El Nino in

2015, and a weak to moderate La Nina in 2016. In early July 2017, BMKG forecast a low probability

for an El Nino to hit Indonesia after referring to the sea surface temperature level (SST), El Nino

Southern Oscillation Index (ENSO), and the Indian Ocean Dipole Index (IOD). BMKG expects that the

Indonesian climate will remain in the neutral range (neither El Nino nor La Nina) through December

2017.

On April 10, 2017 BMKG announced its expectation that the 2017 dry season would arrive later than

normal in 45.9 percent, on time in 35.1 percent, and earlier than normal in 19 percent of the Indonesian

territory. In line with BMKG forecasts, dry season onset occurred in May, June, or July 2017, and is

expected to peak between July and September 2017. East Java, Central Java, and southern parts of

Sumatera continue to receive sporadic rainfall, in line with the forecast of a late onset dry season.

Chart 1. 2017 Indonesian Dry Season Onset Forecast

Chart 2. Forecast of Rainfall Intensity in August 2017

Jakarta

Chart 3. Forecast of Rainfall Intensity in September 2017

Chart 4. Forecast of Rainfall Intensity in October 2017

Source: BMKG

Sufficient rainfall during the previous rainy season and sporadic rainfalls during the current dry season

maintained normal water levels at major Indonesian reservoirs. (See Table 1).

Table 1. Water Elevation at West Java Water Reservoirs, July 18, 2017.

No.

Reservoir

Elevation & Volume Drought Prep.

Elev.

Status

Target Observed Elevation Deviation

Vol. Deviation

Elev. Vol. Elev. Vol.

(m) (mil.m

3) (m)

(mil. m

3) (m) (mil.m

3) (m)

1. Jatiluhur

93.73 360.6

2 103.4

3 n/a 9.7 n/a

87.50 Norm

al

2. Cirata

209.52

160.87

216.07 n/a

6.55 n/a 206.00

Normal

3. Saguling

631.50

138.97

639.19 n/a

7.69 n/a 625.00

Normal

Source: Indonesian Min. of Public Works, Perum Jasa Tirta II (July 18, 2017), processed by FAS/Jakarta.

Note: “Deficit” indicates water levels lower than target, but above drought condition levels

Wheat

Post increases its MY 2016/17 Indonesian wheat import estimate to 9.9 MMT (from its previous

estimate of 9.0 MMT). The change is due to incremental import increases based on feed mill demand.

In line with import increases, Post raises MY 2016/17 Indonesian wheat consumption for feed and

residual use to 1.8 MMT, compared to the previous estimate of 1.2 MMT. The U.S. share of wheat

exports to Indonesia is increased to 1.0 MMT in MY 2016/17 compared to 799,000 MT imported in MY

2015/16.

Corn

Meteorlogical data indicates sustained rainfall in Lampung and Central Java, (two major corn production

areas), enabling continued corn planting on rain-fed production areas. Although reports of downy

mildew resulted in some production losses for second crop corn in 2016/17, Post expects that strong

third crop cycle production will offset losses. As a result, Post maintains its 2016/17 corn production

estimate unchanged. Post increases its 2016/17 Indonesian corn import estimate to 560,000 MT from its

previous estimate of 500,000 MT. The increase is due to higher demand from wet corn milling facilities

producing corn starch. Post likewise increases its 2016/17 FSI consumption estimate to 3.86 MMT.

Restrictions on corn for feed imports remain in place.

Rice

A weak El Nino in MY 2016/17 appears highly unlikely. Low rainfall intensity continues to occur

through the dry season, providing opportunities to grow paddy during the third crop cycle on lowland

irrigated areas. Additional harvested areas are expected to offset yield declines due to brown hopper

infestations in some major producing areas. BULOG reports shortfalls on its domestic procurement

target. However, the GOI remains committed to self-sufficiency goals and is not indicating any intention

to import rice. As a result, Post’s import estimate remains unchanged.

WHEAT

Trade

The Indonesian Flour Mills Association (APTINDO, Asosiasi Produsen Tepung Terigu Indonesia)

reports there were only five flour mills operating in Indonesia between 1970 and 1998. As of 2017,

there are 31 operational flour mills with a total installed capacity of 11.4 MMT, an increase from 10.3

MMT in MY2014/15. Most of the mills are located on Java. Running capacity of the mills reached 70

percent in MY 2015/16. Bogasari, Indonesia’s largest flour mill (with a 52-percent share of the wheat

flour market) is currently running at 85 percent capacity and is updating three flour mills located in

Jakarta. Additional flour mills on Java are also expanding operations. The industry is expected to grow

by five percent in MY 2016/17 due to the price competitiveness of wheat flour-based foods compared to

rice and other staple foods. APTINDO further projected that the total installed capacity of Indonesian

flour mills will reach approximately 14.2 MMT by MY2024/25.

The Indonesian Ministry of Agriculture (MOA) has targeted zero corn imports for MY 2016/17, and is

encouraging mills to use local corn to meet feed milling needs. Additionally, importers report that MOA

will not issue import recommendations for corn substitutes such as feed grade wheat, barley, or

sorghum. These imports restrictions have not only encouraged farmers to grow corn but have also

resulted in high local corn prices, which climbed even higher during April/May lean production period.

With mill gate corn prices reaching as high as Rp. 4,600/kg ($346/MT) the landed price of US soft red

winter wheat is competitive as a feed ingredient. (The landed price for July shipments of US soft red

winter wheat was recorded at Rp. 3,600/kg ($268/MT). Thus, facing import restrictions on corn and

feed-grade wheat, some feed mills have opted to buy food-grade wheat from flour mills. APTINDO

reported that imports of wheat in April and May 2017 have reached 860,000 MT and 1.14 MMT,

respectively, compared to 700,000 MT imported in March 2017. Based on this data, Post has increased

its 2016/17 wheat imports estimate to 9.9 MMT, compared to the previous estimate of 9.0 MMT.

Wheat exports to Indonesia for the period of July 2016 to May 2017 were led by Australia (48.54

percent), Canada (16.7 percent), Ukraine (15.6 percent), and the United States (8.66 percent).

Australia’s majority market share is due to the noodle industry’s preference for Australian standard

white wheat, price, and Australia’s close proximity. U.S. wheat exports to Indonesia in MY 2016/17 are

estimated to reach 1.0 MMT.

Indonesian wheat flour imports during the period of July 2016 to May 2017 declined by 129 percent to

79,430 MT of wheat equivalent, compared to 182,239 MT of wheat equivalent imported during the same

period of MY2015/16. The decline is mainly due to the continued weakness of rupiah against the U.S.

dollar. Domestic flour dominated the market throughout calendar year (CY) 2016, with a 98.9 percent

market share. According to Global Trade Atlas data, Turkey held the largest market share of wheat flour

exports to Indonesia (56 percent), followed by The Philippines (18.3 percent), and Canada (9 percent)

during the July 2016 to May 2017 period.

Consumption

Considering import increases and assuming that similar conditions will continue to the next marketing

year, Post increased its MY 2016/17 and 2017/18 Indonesian wheat consumption estimate for feed and

residual use to 1.8 MMT and 700,000 MT, respectively.

CORN

Production

Indonesia’s first corn season normally takes place between November and February (49 percent). The

second season takes place from March to June (37 percent), while the third runs from July to September

(14 percent). With the delayed arrival of the MY 2016/17 dry season (as explained above) farmers on

rain-fed corn producing lands in Lampung, Central Java, and East Java are able to plant corn during the

third crop cycle. Above average third crop cycle production is expected to offset the slight yield decline

resulting from downy mildew incidents observed in Lampung, Central Java, and East Nusa Tenggara

during the second crop cycle. Hence, Post maintains its 2016/17 Indonesian corn production estimate as

is.

Table 2. Corn Areas Affected by Main Pest and Disease, CY 2016 and Jan – Jun 2017.

N

o

.

Provi

nce

2016 2017

PA Affected Areas

% Affected

Areas to

Planted Areas

PA Affected Areas

% Affected

Areas to

Planted

Areas

L M S F T

To

tal

Aff

ect

ed

F L M S F T

To

tal

Af

fe

ct

ed

F

1 Aceh

29,

147

89

8

9

-

1

90

8

3.1

2

0.0

0

35,

401

67

3

1

-

-

67

4

1.

90

-

2

North

Sumat

era

114

,82

5

73

6

2

-

-

73

8

0.6

4

-

150

,39

1

18

0

-

-

19

0.

01

-

3

West

Sumat

era

43,

163

80

7

3

1

90

0.2

1

0.0

0

61,

078

16

3

1

-

19

0.

03

-

4 R i a u

6,2

82

11

9

21

0

0

14

0

2.2

3

0.0

0

5,0

67

22

3

-

-

25

0.

48

-

5 J a m

b i

5,0

49

55

5

-

0

60

1.2

0

0.0

0

6,9

02

23

3

-

-

25

0.

36

-

6

South

Sumat

era

50,

973

51

5

10

0

-

52

6

1.0

3

-

63,

832

25

2

26

-

-

27

8

0.

44

-

7 Bengk

ulu

8,7

63

46

1

-

-

46

0.5

2

-

15,

875

29

-

-

-

29

0.

18

-

8 Lamp

ung

166

,68

1

15

8

1

-

21

18

0

0.1

1

0.0

1

297

,01

3

20

9

-

-

-

20

9

0.

07

-

9

Bangk

a

Belitu

ng

351

1

-

-

-

1

0.2

3

-

1,4

15

-

-

-

-

-

-

-

1

0

Riau

Island

s

346

-

-

-

-

-

-

-

252

-

-

-

-

-

-

-

1

1

Jakart

a

-

-

-

-

-

-

-

-

-

-

-

-

-

- - -

1

2

West

Java

92,

277

64

1

-

-

-

64

1

0.6

9

-

63,

294

26

3

-

-

-

26

3

0.

42

-

1

3

Centra

l Java

244

,70

1

90

2

18

-

-

92

0

0.3

8

-

278

,59

8

68

9

3

-

10

70

2

0.

25

0.

00

1

4

Yogya

karta

9,5

59

60

-

-

-

60

0.6

3

-

8,4

19

14

-

-

-

14

0.

17

-

1

5

East

Java

450

,86

1

85

9

15

6

5

-

1,0

20

0.2

3

-

413

,88

1

23

7

64

7

-

30

8

0.

07

-

1

6

Bante

n

3,4

98

-

-

-

-

-

-

-

14,

559

-

-

-

-

-

-

-

1

7 B a l i

3,0

59

5

-

-

-

5

0.1

6

-

2,2

34

-

-

-

-

-

-

-

1

8

West

Nusa

Tengg

ara

130

,18

4

12

1

23

-

-

14

4

0.1

1

-

117

,01

2

84

-

-

-

84

0.

07

-

1

9

East

Nusa

Tengg

ara

119

,44

8

2,1

53

-

-

5

2,1

58

1.8

1

0.0

0

79,

405

55

1

-

-

-

55

1

0.

69

-

2

0

West

Kalim

antan

12,

773

49

-

-

-

49

0.3

8

-

13,

398

13

-

-

-

13

0.

10

-

2

1

Centra

l

Kalim

antan

1,3

29

4

-

-

-

4

0.3

0

-

2,4

08

-

-

-

-

-

-

-

2

2

South

Kalim

antan

12,

953

-

-

-

-

-

-

-

30,

039

-

-

-

-

-

-

-

2

3

East

Kalim

antan

3,1

05

13

3

-

-

4

13

7

4.4

0

0.1

3

12,

918

10

0

-

-

-

10

0

0.

77

-

2

4

North

Sulaw

esi

82,

786

44

9

1

-

42

49

3

0.6

0

0.0

5

186

,62

1

15

7

-

-

-

15

7

0.

08

-

2

5

Centra

l

Sulaw

esi

34,

119

12

4

-

-

-

12

4

0.3

6

-

41,

528

89

-

-

-

89

0.

21

-

2

6

South

Sulaw

esi

177

,36

0

57

6

8

-

-

58

4

0.3

3

-

194

,80

9

17

9

-

-

-

17

9

0.

09

-

2

7

Southe

ast

Sulaw

esi

15,

161

50

9

23

-

-

53

2

3.5

1

-

31,

811

46

-

-

-

46

0.

14

-

2

8

Goron

talo

87,

982

1,5

28

17

23

23

1,5

91

1.8

1

0.0

3

174

,57

5

57

4

-

-

0

57

4

0.

33

0.

00

2

9

West

Sulaw

esi

20,

835

63

9

-

-

-

63

9

3.0

6

-

114

,42

2

20

0

5

-

-

20

4

0.

18

-

3

0

M a l

u k u

4,7

57

46

-

-

-

46

0.9

7

-

7,2

74

8

-

-

-

8

0.

11

-

3

1

North

Maluk

u

2,9

10

6

-

1

19

25

0.8

7

0.6

6

8,0

21

2

-

-

-

2

0.

03

-

3

2

West

Papua

1,3

02

52

-

-

-

52

4.0

1

-

310

38

-

-

-

38

12

.3

2

-

3

3 Papua

1,8

36

15

8

15

-

-

17

3

9.4

3

-

1,5

98

13

-

-

-

13

0.

79

-

Total

1,9

38,

372

11,

62

1

31

6

32

11

6

12,

08

5

0.6

2

0.0

1

2,4

34,

358

4,4

98

10

7

7

10

4,6

22

0.

19

0.

00

Note: PA = Planted Areas, L = Light, M = Medium, S = Severe, F = Harvest Failure.

Source: Data and Information Center, Ministry of Agriculture.

On May 5, 2017, the Indonesian Ministry of Trade (MOT) issued regulation 27/2017 on staple

commodities reference prices. The new regulation revokes MOT regulation 63/2016, but leaves corn

reference prices unchanged (See ID1628). Farm gate corn prices are increasing in response to MOA’s

refusal to issue corn import recommendations, lean season corn production, and MOT’s reference price.

Farm gate corn prices currently range between Rp. 3,600/kg ($270/MT) and Rp. 4,400/kg ($331/MT),

compared to Rp. 3,300/kg ($248/MT) to Rp. 3,500/kg ($263/MT) in March 2017. Feed mill-gate corn

prices are increasing to Rp. 4,250/kg ($319/MT) to Rp. 4,750/kg ($357/MT) from Rp. 3,900/kg

($293/MT) in March 2017.

Feed mills report that the first main harvest period of MY2016/17 ran from early January 2017 through

March. Farmers are currently planting the third crop cycle of MY 2016/17 to be harvested around

September or October 2017.

Consumption

The Indonesian feed mill sector consists of 76 feed mills with a total installed capacity of 22 MMT.

Approximately 49 mills are located on Java. The Indonesian Feed Producers Association (Asosiasi

Produsen Pakan Indonesia, APPI) has committed to prioritize domestic corn purchases over imports in

support of MOA’s corn self- sufficiency goals. Corn accounts for 50 percent of feed formulations and

35 percent of poultry feed production costs. APPI notes that expensive domestic corn prices cannot be

passed on to consumers, thus reducing feed mills’ margins. This, combined with the general economic

slowdown categorized by the weak rupiah vis-à-vis the dollar, is expected to continue to slow

commercial poultry feed consumption growth. APPI estimates that Indonesian feed consumption will

increase by 5 percent to 17.0 MMT in MY2016/17.

The poultry industry consumes approximately 83 percent of Indonesia’s animal feed. Aquaculture

consumes 11 percent and the remaining six percent is consumed by cattle and swine. The Indonesian

poultry industry reports that the MY2016/17 poultry population is expected to reach 3.5 billion broilers,

200 million layers, and 24.8 million breeders. Demand for aquaculture feed in MY 2016/17 is estimated

to increase by 10 percent, slower growth than the 13 percent growth in MY2015/16. Slower growth is

due to diseases affecting shrimp production. Due to the continued expansion of existing mills, there is

an additional 1.5 MMT installed capacity, raising total installed capacity of Indonesian feed mills to 22

MMT per annum. Millers report that Indonesian mills are running at 70 – 80 percent capacity.

A new wet mill producing corn starch in East Java has been operational since April 2017. Installed

capacity of the new mill is 86,000 MT of corn starch per year. The new mill will produce corn gluten

meal (12,000 MT of installed capacity per year) and corn gluten feed (48,000 MT of installed capacity

per year) in addition to starch. The facility uses imported corn as raw material. As such, Post maintain

its 2016/17 feed corn consumption estimate, but increases its estimate of corn food, seed and industrial

(FSI) consumption to 3.860 MMT from 3.8 MMT to reflect increasing demand for corn starch raw

material.

Trade

MOA continues to restrict imports of corn and corn substitutes for feed production while allowing corn

imports for FSI. MOT regulation number 20/2016 on corn imports allows only BULOG to import feed

corn. In October 2016 MOT authorized BULOG to import a total of 200,000 MT of corn. BULOG

managed to bring in the corn by the end of 2016. BULOG’s intention was to distribute the imported

corn to micro, small and medium poultry farmers. However, as of early July 2017 BULOG still holds a

total of 52,993 MT of undistributed imported corn. In an effort to prevent storage losses, BULOG plans

to sell the imported corn to commercial feed mills.

Despite feed corn import restrictions, the entrance of the new corn wet mill facility is expected to slightly increase

imports. Therefore, Post increases its 2016/17 corn import estimate to 560,000 MT from its previous estimate of

500,000 MT. According to Global Trade Atlas, Indonesian corn imports originated from the United

States (73 percent), Brazil (13 percent) and Thailand (7 percent) during the period of October 2016 to

May 2017.

RICE, MILLED

Production

Favorable weather and sufficient water from reservoirs provided an opportunity for farmers on irrigated

lowland areas to plant third crop cycle paddy (late June through early July 2017). Humid field

conditions during the dry season, coupled with limited crop rotations, however, resulted in brown

hopper infestations throughout Java and southern Sumatera.

Left and right picture: Bali paddy plantings, early July 2017.

Table 3. Paddy Areas Affected by Main Pest and Disease, CY 2016 and Jan – Jun 2017.

N

o

.

Provin

ce

2016 2017

Plan

ted

Area

Affected Areas

% Affected

Areas to Planted

Areas

Plan

ted

Area

Affected Areas

% Affected

Areas to

Planted Areas

L M S F Tot

al

Tot

al

Aff

ecte

d

F L M S F Tot

al

To

tal

Aff

ect

ed

F

1 Aceh

216,

751

7,9

82

234

32

-

8,2

48

3.8

1

-

228,

863

6,2

85

204

16

-

6,5

05

2.8

4

-

2

North

Sumate

ra

407,

956

2,8

02

144

58

13

3,0

17

0.7

4

0.0

0

537,

459

3,0

38

371

115

6

3,5

30

0.6

6

0.0

0

3

West

Sumate

ra

275,

838

1,4

02

390

133

182

2,1

08

0.7

6

0.0

7

273,

788

674

213

60

19

966

0.3

5

0.0

1

4 R i a u

40,9

86

1,0

36

518

320

3

1,8

76

4.5

8

0.0

1

34,1

94

395

189

4

2

590

1.7

3

0.0

1

5 J a m b

i

103,

389

1,1

23

377

56

19

1,5

75

1.5

2

0.0

2

85,0

68

620

75

28

24

747

0.8

8

0.0

3

6

South

Sumate

ra

536,

037

28,

240

2,9

20

997

425

32,

582

6.0

8

0.0

8

420,

076

17,

292

455

218

86

18,

050

4.3

0

0.0

2

7 Bengku

lu

102,

081

1,6

54

266

16

1

1,9

37

1.9

0

0.0

0

86,2

99

1,0

37

107

9

6

1,1

59

1.3

4

0.0

1

8 Lampu

ng

531,

560

7,1

37

480

69

-

7,6

85

1.4

5

-

439,

062

7,3

55

675

203

4

8,2

37

1.8

8

0.0

0

9

Bangka

Belitun

g

3,61

4

711

1

-

1

714

19.

75

0.0

3

8,15

0

273

3

-

5

280

3.4

3

0.0

6

1

0

Riau

Islands

173

-

-

-

-

-

-

-

173

-

-

-

-

-

-

-

1

1 Jakarta

677

62

-

-

-

62

9.0

9

-

472

63

-

-

-

63

13.

25

-

1

2

West

Java

1,31

5,82

1

46,

014

348

37

-

46,

399

3.5

3

-

1,15

6,45

4

52,

006

1,0

38

273

20

53,

336

4.6

1

0.0

0

13

Central Java

1,214,00

7

44,714

4,631

327

25

49,698

4.09

0.00

1,034,68

9

49,198

4,571

574

296

54,639

5.28

0.03

1

4

Yogyak

arta

68,0

07

3,7

13

555

6

49

4,3

23

6.3

6

0.0

7

61,9

14

2,6

79

138

1

3

2,8

21

4.5

6

0.0

0

1

5

East

Java

1,41

2,89

7

24,

021

4,2

76

637

32

28,

966

2.0

5

0.0

0

1,09

9,15

4

32,

261

3,8

11

625

192

36,

888

3.3

6

0.0

2

1

6 Banten

276,

880

6,2

26

42

3

-

6,2

71

2.2

6

-

235,

724

8,8

80

916

416

282

10,

493

4.4

5

0.1

2

1

7 B a l i

91,7

24

1,9

28

130

9

100

2,1

67

2.3

6

0.1

1

78,4

83

2,1

85

102

69

7

2,3

63

3.0

1

0.0

1

18

West

Nusa Tengga

ra

329,132

4,392

53

12

-

4,457

1.35

-

240,271

3,047

62

2

-

3,111

1.29

-

1

9

East

Nusa

Tengga

ra

182,

982

5,0

60

-

-

-

5,0

60

2.7

7

-

167,

339

3,7

57

-

-

-

3,7

57

2.2

5

-

2

0

West

Kalima

ntan

139,

866

1,4

40

117

5

7

1,5

69

1.1

2

0.0

1

121,

347

1,7

54

21

-

23

1,7

98

1.4

8

0.0

2

2

1

Central

Kalima

ntan

135,

732

2,0

89

35

10

-

2,1

34

1.5

7

-

126,

515

509

-

-

-

509

0.4

0

-

2

2

South Kalima

ntan

402,

097

971

319

87

22

1,3

99

0.3

5

0.0

1

377,

977

616

372

49

28

1,0

65

0.2

8

0.0

1

2

3

East

Kalima

ntan

54,8

24

2,3

60

399

10

-

2,7

69

5.0

5

-

36,4

55

2,8

47

256

6

-

3,1

09

8.5

3

-

2

4

North

Sulawe

si

80,2

39

344

-

-

-

344

0.4

3

-

76,0

47

541

2

-

41

584

0.7

7

0.0

5

2

5

Central Sulawe

si

160,

551

4,6

09

286

276

434

5,6

05

3.4

9

0.2

7

157,

832

1,7

09

76

14

146

1,9

45

1.2

3

0.0

9

2

6

South

Sulawe

si

871,

044

12,

242

360

44

22

12,

667

1.4

5

0.0

0

732,

207

4,9

95

220

69

7

5,2

91

0.7

2

0.0

0

2

7

Southea

st

Sulawe

si

123,

308

8,4

83

640

59

123

9,3

05

7.5

5

0.1

0

105,

349

6,3

82

122

58

68

6,6

30

6.2

9

0.0

6

2

8

Goronta

lo

37,544

1,817

50

-

12

1,879

5.01

0.03

30,125

2,117

0

2

-

2,119

7.03

-

2

9

West

Sulawe

si

91,2

42

3,8

43

42

3

214

4,1

02

4.5

0

0.2

3

72,2

12

5,2

63

170

20

1

5,4

54

7.5

5

0.0

0

3

0

M a l u

k u

17,2

57

1,4

79

338

75

-

1,8

91

10.

96

-

14,7

82

764

-

-

-

764

5.1

7

-

3

1

North

Maluku

13,2

82

600

9

-

-

609

4.5

8

-

13,1

68

116

15

-

-

131

1.0

0

-

3

2

West

Papua

3,74

4

384

-

-

-

384

10.

24

-

1,99

0

418

-

-

-

418

21.

01

-

3

3 Papua

42,4

31

1,3

33

174

235

-

1,7

42

4.1

1

-

47,8

84

46

19

-

-

65

0.1

4

-

Total

9,28

3,67

3

230

,21

2

18,

132

3,5

14

1,6

84

253

,54

2

2.7

3

0.0

2

8,10

1,52

0

219

,12

0

14,

203

2,8

29

1,2

66

237

,41

7

2.9

3

0.0

2

Note: PA = Planted Areas, L = Light, M = Medium, S = Severe, F = Harvest Failure.

Source: Data and Information Center, Ministry of Agriculture.

Third crop harvest will take place in October 2017, with Post expecting an expansion of paddy planting

area in North Sumatera, Lampung, and West Kalimantan due to the late arriving dry season. While

planted area is expanding, farmers are also reporting brown hopper infestations. Pesticide companies in

Central Java are reporting significant pesticide sale increases in July 2017 in response to these

infestations, with the Ministry of Agriculture distributing pesticide assistance in brown hopper infested

areas as well as providing additional field officials to respond to the pest problem. Considering

expanded plant area and brown hopper infestations, Post maintains its 2016/17 and 2017/18 production

estimates unchanged. Post will continue observing the planting progress.

Trade

BULOG has set its procurement target at 3.7 MMT of milled rice equivalent for MY 2016/17. BULOG

normally meets 60 percent of its procurement target during the first main harvest period (before June).

As of the middle of July 2017, BULOG domestic procurement totaled 1.3 MMT of milled rice

equivalent, about 30 percent of its procurement target. This is lower than the 1.96 MMT of milled rice

equivalent procured during the same period of MY2015/16. Despite flexibility provided under MOA

regulation No. 3/2017 for BULOG to buy paddy and rice above or below the required quality, BULOG

is struggling to meet its target. Post notes that prices for medium quality paddy and rice remain well

above the government purchasing price, while tighter competition with rice millers is impeding

BULOG’s procurement efforts during the first and second harvests.

BULOG is required to maintain a minimum year end stock level of 2 MMT. Indonesian regulations

restrict rice imports one month prior to, during, and two months after the main harvest period.

Indonesian regulation no. 103/2015 only permits BULOG to import medium quality rice with a

maximum 25 percent broken grains. Private companies can import specialty rice (jasmine rice, basmati

rice, sushi rice, rice for diabetics and rice seed, for example). The purpose of medium quality rice

imports by BULOG is to maintain rice price stability, to overcome post disaster circumstances, and for

distributions to the poor and food-insecure. According to Indonesian regulations, the GOI may decide to

authorize BULOG to import medium quality rice after considering BULOG stock levels, disparity

between average rice prices and the government purchasing price, and the national rice surplus estimate.

Private sector importers holding a producer importer identification number can import specialty rice

once an import approval from the Ministry of Trade is obtained. The import permit is valid for six

months in the current year.

With BULOG’s procurement realization below 50 percent as of July, it seems unlikely that BULOG will

meet its target with production from the third harvest (which contributes about 15-20 percent of

Indonesia’s total production). Considering that BULOG must still distribute another 1.4 MMT of rice

under rice for the poor program, GOI will need to reconsider efforts to maintain BULOG’s stock at the

mandated level. Post notes that the authority to procure, import, manage stocks, and set government

purchasing prices for paddy and rice rests with the Ministry of Agriculture (Presidential Decree No.

20/2017). MOA is expected to continue to aggressively pursue rice self-sufficiency policies. Therefore,

it is unlikely that the GOI will authorize BULOG to import in the near future.

During the January to May 2017 period, Global Trade Atlas reported that Indonesia imported rice from

Thailand (53 percent) and India (22 percent). All of the rice was imported by the private sector.

Indonesian regulations state that only BULOG can import rice with a maximum of 25 percent broken,

while state own companies, provincial owned companies, and private sector exporters can import rice

with a maximum of 5 percent broken. According to Global Trade Atlas, Indonesia exported rice to Sri

Lanka (92 percent), Canada (4 percent), and Ghana (1 percent) during the period of January to May

2017. Total volume exported was 5,380 MT.

Based on the abovementioned situation, Post does not make any changes to Indonesian trade estimates.

Consumption

In MY 2016/17 the GOI modified the raskin program, changing its name to “Rice for the Prosperous

(beras sejahtera, rastra).” The program is now broken into two parts: the regular rastra distribution as

well as the unintuitively named non-cash food aid program (Bantuan Pangan Non Tunai, BPNT), which

distributes cash cards for participants to redeem rice and sugar on the open market. BULOG will

continue to implement both programs. In MY 2016/17 BULOG will distribute rastra to a total of 14.4

million families, while another 1.1 million families (formerly raskin recipients) will receive the non-

cash food aid (BPNT) card. Every family under the regular rastra program will receive 15 kg of rice at

the price of Rp. 1,600/kg ($119/MT) per month. Under BPNT, the GOI will deposit Rp. 110,000 ($8.20)

onto each card. The card recipients who reside in 44 pilot project cities can swipe the card at selected

stores for a total of 10 kg of rice and 2 kg of sugar. As of middle of July 2017, BULOG has distributed

a total of 1,051,000 MT of milled rice to rastra recipients.

Post noticed no significant changes in rice consumption trends. Therefore, Post maintains the estimate of

MY 2016/17 and MY 2017/18 as is.

Prices

The price of wet paddy and rice remains above the government’s purchasing price. Current farm gate

prices of wet paddy in Java range from Rp. 3,500/kg ($263/MT) to 4,800/kg ($361/MT). Despite some

brown hoppers infestations, rice traders reported that small harvests on Java have maintained continuous

supply to Jakarta’s rice wholesale market. Combined with lower post-Ramadhan demand, medium

quality rice prices at the Cipinang wholesale market have fallen slightly, from Rp. 10,200/kg ($767/MT)

in June 2017 to Rp. 10,000/kg ($752/MT) on July 24, 2017.

PSD TABLES

Table 4. PSD: WHEAT

Wheat 2015/2016 2016/2017 2017/2018 Market Begin Year Jul 2015 Jul 2016 Jul 2017

Indonesia USDA Official New Post USDA Official New Post USDA Official New Post

Area Harvested 0 0 0 0 0 0

Beginning Stocks 1316 1316 2057 2057 2257 1657

Production 0 0 0 0 0 0

MY Imports 10116 10116 9900 9900 9500 9500

TY Imports 10116 10116 9900 9900 9500 9500

TY Imp. from U.S. 799 799 0 1000 0 940

Total Supply 11432 11432 11957 11957 11757 11157

MY Exports 275 275 300 300 300 300

TY Exports 275 275 300 300 300 300

Feed and Residual 1600 1600 1200 1800 500 700

FSI Consumption 7500 7500 8200 8200 8600 8600

Total Consumption 9100 9100 9400 10000 9100 9300

Ending Stocks 2057 2057 2257 1657 2357 1557

Total Distribution 11432 11432 11957 11957 11757 11157

Yield 0 0 0 0 0 0

(1000 HA) ,(1000 MT) ,(MT/HA)

Note: Figures in the “New Post” columns are not USDA Official figures.

Table 5. PSD: CORN

Corn 2015/2016 2016/2017 2017/2018 Market Begin Year Oct 2015 Oct 2016 Oct 2017

Indonesia USDA Official New Post USDA Official New Post USDA Official New Post

Area Harvested 3300 3300 3400 3400 3500 3500

Beginning Stocks 1666 1666 1823 1823 1013 1018

Production 10500 10500 10900 10900 11350 11350

MY Imports 1778 1778 500 560 500 500

TY Imports 1778 1778 500 560 500 500

TY Imp. from U.S. 185 185 0 420 0 180

Total Supply 13944 13944 13223 13283 12863 12868

MY Exports 21 21 10 5 10 5

TY Exports 21 21 10 5 10 5

Feed and Residual 8000 8000 8400 8400 8600 8600

FSI Consumption 4100 4100 3800 3860 3600 3600

Total Consumption 12100 12100 12200 12260 12200 12200

Ending Stocks 1823 1823 1013 1018 653 663

Total Distribution 13944 13944 13223 13283 12863 12868

Yield 3.1818 3.1818 3.2059 3.2059 3.2429 3.2429

(1000 HA) ,(1000 MT) ,(MT/HA)

Note: Figures in the “New Post” columns are not USDA Official figures.

Table 6. Indonesian Paddy Harvested Area, Yield, and Production

By Crop Cycle and Ecosystem

January - April May - August September - December January- December

Ye

ar

Harveste

d Yield

Producti

on

Harveste

d Yield Production

Harveste

d Yield

Producti

on

Harvest

ed Yield

Producti

on

Area

(Ha)

(Cwt/

Ha) (Ton)

Area

(Ha)

(Cwt/

Ha) (Ton)

Area

(Ha)

(Cwt/

Ha) (Ton)

Area

(Ha)

(Cwt/Ha

) (Ton)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

Paddy Total

201

7*

6,541,38

7 51.74

33,842,9

04

5,382,47

0 52.91

28,467,584

3,633,25

5 52.97

19,247,0

05

15,555,112 52.43

81,557,

493

201

6

5,982,19

0 52.49

31,399,7

05

5,330,19

0 51.86

27,643,361

3,844,57

2 52.84

20,315,3

73

15,156,952 52.36

79,358,

439

201

5

6,157,83

7 53.68

33,057,1

15

4,945,47

3 52.12 25,776,257

3,013,32

8 54.97

16,564,4

69 14,116,638 53.41

75,397,

841

201

4

6,204,91

0 50.87

31,562,7

89

4,452,13

5 51.12 22,757,916

3,140,26

2 52.63

16,525,7

60 13,797,307 51.35

70,846,

465

201

3

6,272,32

3 51.65

32,398,6

77

4,510,18

9 50.92 22,967,655

3,052,74

0 52.13

15,913,3

77 13,835,252 51.52

71,279,

709

Irrigated Paddy

201

7*

5,670,74

9 54.73

31,034,5

29

5,154,25

8 53.73 27,694,778

3,550,17

8 53.51

18,995,8

42 14,375,186 54.07

77,725,

149

201

6

5,118,50

7 55.85

28,588,5

79

5,085,67

9 52.69 26,797,461

3,781,74

1 53.15

20,100,1

89 13,985,927 53.97

75,486,

229

201

5

5,266,98

6 57.13

30,088,6

36

4,784,12

3 52.74 25,229,780

2,978,12

8 55.23

16,448,0

80 13,029,237 55.08

71,766,

496

201

4

5,271,67

5 53.97

28,449,1

16

4,317,11

6 51.66 22,302,870

3,077,42

6 53.13

16,350,3

75 12,666,347 52.98

67,102,

361

201

3

5,303,79

4 54.91

29,124,5

07

4,378,88

7 51.46 22,533,292

2,989,32

2 52.63

15,733,8

09 12,672,003 53.18

67,391,

608

Rainfed Paddy

201

7* 870,638 32.26

2,808,37

4 226,212 34.16 772,806 83,077 30.23 251,163 1,179,927 32.48

3,832,3

43

201

6 863,683 32.55

2,811,12

7 244,512 34.60 845,901 62,831 34.25 215,183 1,171,026 33.07

3,872,2

11

201

5 890,851 33.32

2,968,47

9 161,350 33.87 546,477 35,200 33.07 116,389 1,087,401 33.39

3,631,3

45

201

4 933,235 33.36

3,113,67

3 134,889 33.73 455,046 62,836 27.91 175,385 1,130,960 33.11

3,744,1

04

201

3 968,529 33.81

3,274,17

0 131,302 33.08 434,363 63,418 28.31 179,568 1,163,249 33.42

3,888,1

01

Source: Indonesian Statistics Agency (BPS) and MOA.

Note: *: First forecast figures.

Table 7. Indonesian Corn Harvested Area, Yield, and Production By Crop Cycle

January - April May - August September - December January- December

Year Harvest

ed Yield

Producti

on

Harvest

ed Yield

Producti

on

Harvest

ed Yield

Producti

on

Harvest

ed Yield

Producti

on

Area

(Ha)

(Cwt/H

a) (Ton)

Area

(Ha)

(Cwt/H

a) (Ton)

Area

(Ha)

(Cwt/H

a) (Ton)

Area

(Ha)

(Cwt/H

a) (Ton)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

Corn

2017

*

2,363,2

06 49.58

11,716,8

20

1,584,0

52 52.14

8,259,81

1

1,100,1

35 54.99

6,049,85

5

5,047,3

92 51.56

26,026,4

86

2016

2,114,8

99 50.31

10,640,4

90

1,287,1

38 53.25

6,854,09

0

1,042,3

06 58.37

6,083,71

3

4,444,3

43 53.05

23,578,2

93

2015

1,948,0

50 48.99

9,544,01

2

1,133,9

24 51.19

5,804,24

9 705,393 60.45

4,264,17

4

3,787,3

67 51.78

19,612,4

35

2014

1,890,5

01 45.54

8,608,93

5

1,155,7

14 50.97

5,891,11

0 790,804 57.01

4,508,38

1

3,837,0

19 49.54

19,008,4

26

2013

1,939,7

96 45.49

8,823,36

8

1,089,6

91 48.74

5,310,77

8 792,017 55.27

4,377,70

7

3,821,5

04 48.44

18,511,8

53

Source: Indonesian Statistics Agency (BPS) and MOA.

Note: *: First forecast figures.

Table 8. Exchange Rate Yea

r Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

201

6

13,84

6

13,39

5

13,27

6

13,20

4

13,61

5

13,18

0

13,09

4

13,30

0

12,99

8

13,05

1

13,56

3

13,43

6

2017

13,343

13,352

13,308

13,327

13,321

13,319

13,304

Note: Exchange rate is Rp. 13,304/USD 1, as of July 19, 2017.