Miller Magazine Issue: 115 July 2019

INDONESIA 84 MILLER / JULY 2019 expected to contribute to over 40 percent of all In- donesian wheat imports through 2018/19. Domestic flour will continue to dominate the market throughout 2018/19, with a 99.9 percent market share. In line with population and economic growth, hu- man consumption of wheat is estimated to increase to 8.9 million tons in 2018/19 and to 9 million tons in 2019/20. Based on higher corn production, 2018/19 wheat consumption for feed is expected to decline to 2.0 million tons, compared to the 2.1 million tons in 2017/18. Growth in feed milling is expected to in- crease wheat consumption for feed to 2.2 million tons in 2019/20. FLOUR CONSUMPTION INCREASING In 2017/18, annual per capita wheat flour con- sumption reached an estimated 25 kg, an increase from 23 kg per capita during 2015/16. Relatively sta- ble macro-economic conditions have allowed mid- dle and upper-middle income consumers to diversify their diets to include more western-style foods like bread and pasta. Rather than eating rice three times daily, many Indonesians have switched to eating bread or noo- dles for breakfast. Restaurants and high-end bakeries are also driving demand for wheat-based food products, especially in ma- jor cities including Jakarta, Sura- baya, Medan, and Bandung. Two-thirds of Indonesian flour users are considered Small and Medium Enterprise (SME), characterized as traditionally managed, family-owned, and community-oriented business. These include small scale wet noodle makers, street food ven- dors, low-end bread and bak- ery businesses, and traditional Indonesian cake makers. The other third are large enterprises, including several publicly-listed companies, with advanced production facilities and professional management. These pro- ducers include instant noodle manufacturers, high- end bakeries, and cookie and biscuit manufacturers. On a per meal basis, instant noodle prices are cur- rently cheaper than rice, and many more lower and middle income consumers substitute instant noodles for breakfast or dinner. Modern cafes serving instant noodles are flourish- ing in urban areas, increasing demand for the noodle industry. The noodle industry consumes 70 percent of Indonesia’s wheat flour. In addition to noodles, more high-end and artisan bakeries are coming online, driv- ing the bakery industry, which already accounts for 20 percent of flour consumption. The remaining 10 percent is consumed by household and commercial biscuit producers. CORN PRODUCTION Government efforts to increase corn production by es-