Miller Magazine Issue: 144 December 2021

90 Country Profile MILLER / december 2021 The world’s largest importer of wheat for a long time has been Egypt. Egypt has been a big buyer in part due to a diet that is supported by heavily sub- sidised bread. The majority of the country is able to buy bread at subsidised rates. The country also has an insufficient production capacity to meet the requirements of 100million people. The place of Egypt at the top of the wheat export tree might be in contention in the coming years, with our most populous neighbour, Indone- sia, a potentially viable contender. Indonesia, whilst geographically distant with Egypt shares some similarities. They have a large population, with wheat-based products being a large proportion of the diet. Suppose we are look- ing at large wholesale change in wheat supply and demand over the next decade. In that case, part of that move will come from Indonesia. In Australia, our media and analysts tend to be focused on China. China tends to be a nation that grabs our headlines. This has become increasingly so in recent times as political intrigue between Chi- na and various nations around the world increased, from the US-China trade war to the decision to ef- fectively ban Australian barley exports. It sells newspapers, however from Australia, In- donesia is the quiet performer and has an oppor- tunity to be a formidable partner for a variety of agricultural products from wheat to livestock. POPULATION The population is forecast at approximately 274m people, more than ten times the population of Aus- tralia at 25.6m. It is expected that the population will grow to 330m by 2050. That is a huge number of mouths to feed, and it’s all right on the doorstep of Australia. The growing population and the lack of local production have resulted in ever-growing imports. During the last half of the 2000s, Indonesia import- ed on average 5.6mmt. During the past five years, this has jumped to 10.5mmt. WEALTH The reality, though is that population is not the sole determinate of the increase in the growth of imports of wheat into Indonesia. Increasing demand also comes from increasing wealth. As populations become more wealthy, they increase their capacity to purchase more food. This is es- pecially seen in developing countries as they move into higher wealth bands. The general trend is for more bakery products, and then as wealth increases more meat proteins. Chart 3 shows the trend of wheat imports vs GDP per capita in Indonesia. There is a close relation- ship between increasing GDP and increased im- ports. It would be expected that imports of wheat will continue to increase throughout much of this decade. The development of global wealth, and increas- ing spending power by developing countries such as Indonesia is a benefit to all in the agricultural supply chain through increased demand for higher valued food. INCREASED FEED DEMAND Increasing demand for animal protein in Indo- nesia is a further source of grains demand, albe- it feed quality. The bulk of Indonesian live cattle imports from Australia are feeder cattle and it is estimated that the beef produced from these In- CHART 1 CHART 2