Indonesian food demand is predicted to treble by 2050, increasing import potential

By 2050, Indonesia's food demand is anticipated to treble, and Australian imports might assist bridge the gap.

Jared Greenville, executive director of the Australian Bureau of Agricultural and Resource Economics (ABARES), believes Indonesia's food market has significant development potential.

"Based on strong growth in the country's appetite for more variety and higher-value goods including meat, dairy, fruit, and vegetables, we predict food demand to triple by 2050," he said.

According to a new research published by ABARES, Indonesia's trade policies, particularly after 2012, have contributed to the poverty and hunger of many Indonesians.

"Historically, the emphasis on self-sufficiency has come at a great economic and societal cost, primarily in the form of higher food prices," the report stated.

COVID-19 restrictions, meanwhile, according to the World Bank, have pushed an additional 1.1 million Indonesians into poverty.

According to the report, the epidemic has set back Indonesia's poverty-reduction efforts by three years, with 27.5 million Indonesians – or 10% of the population – now categorised as poor.

Foreign investment could make food cheaper

According to ABARES, letting greater foreign investment into Indonesia might lower food prices and enhance quality.

It also forecasts that once Indonesia's health crisis has passed, the country's burgeoning and highly urbanised middle class would put pressure on policymakers to allow more imported food in.

Cold-climate Australian fruit, according to Dr. Greenville, could be among those goods.

"Another one where there's a lot of possibilities is red meat," he said.

"It's just because of Australia's size and relative superiority in beef and sheep meat production."

Middle class will demand more imports

By 2050, ABARES estimates that imported foodstuffs will account for almost three-quarters of Indonesian food consumption growth.

Many Australian farmers, particularly beef producers, may be irritated by failed attempts to sell into the Indonesian market, according to Dr. Greenville.

But he stressed the need of perseverance.

"Australia has a long history with Indonesia, as one of our closest neighbours... there have been trade irritants, and Indonesia has a rather complex regulatory framework to engage with," he added.

"However, I believe the incremental and long-term tale truly highlights the value of sticking to closer market links."

"There's going to be a significant potential there if some of these statistics come to fruition in the future."