Australia’s biggest wheat customer is growing fast and meeting its needs should be a key priority for Australia now and in the future, according to AEGIC analysis.
AEGIC has released the first in a series of reports analysing where Australia’s grain demand is likely to come from in coming years.
The Indonesian wheat market: its strategic importance to Australia outlines Indonesia’s economic and demographic trends and reveals the dramatic growth Indonesia will experience towards 2030.
Indonesia is projected to be the world’s 5th largest economy by 2030, according to AEGIC Chief Economist Prof Ross Kingwell.
“In little over 10 years, Indonesia will have more than 30 million more mouths to feed – more than the entire population of Australia,” he said.
Australia’s biggest wheat customer by far, Indonesia takes in 4.2mmt of Australian wheat worth $1.2 billion each year on average – nearly one quarter of all Australian wheat exports.
“It is important for the Australian wheat industry to understand Indonesia’s wheat market trends, our competitor challenges and potential disruptive risks,” Prof Kingwell said.
“Indonesia is currently Australia’s main wheat customer, and there are several reasons why a better understanding of Indonesia’s future wheat demand and its competing suppliers is needed.”
Prof Kingwell said Indonesia was geographically close to Australia, with growing wealth, a growing population and growing regional influence.
“Indonesians will become increasingly wealthy and urban, and their diets will change to include more wheat products and less rice.
“For both countries’ mutual economic, societal and security benefit, it is important that Australia positions itself to be an affordable, reliable supplier of wheat that has qualities desired by Indonesian consumers, now and in years to come.”
Prof Kingwell said for all of these reasons, the question for Australia should be: how should Australia position its wheat offering to Indonesia to serve Indonesian needs while delivering value for Australian grain producers?
This question will be addressed in subsequent AEGIC reports.
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