SINGAPORE, Reuters – Wheat imports by Indonesia, the world’s No.2 buyer of the grain, are likely to be pressured in 2019 by reduced appetite for the commodity from animal feed makers, a top official at the country’s biggest milling company said on Wednesday.
Indonesia has emerged as the world’s second-largest wheat importer in recent years as people shift away from rice, consuming more noodles and bakery products.
Imports had also been buoyed as feed producers increasingly switched to using wheat from corn after the government curbed the use of foreign corn in animal feed in a bid to protect local corn farmers.
But demand from feed mills has faltered since they were required to import wheat under quotas, said Franciscus Welirang, chief executive of PT Bogasari Mills.
“In 2017, Indonesia imported 11.4 million tonnes of wheat with feed makers using around 3 million tonnes out of that. Last year, imports dropped to around 10 million tonnes as feed use was around 1.5 million tonnes,” Welirang told Reuters at a grains conference in Singapore.
“This year we will maintain at around 10 million tonnes or reduce a little bit, depending on feed use.”
Indonesia has shifted to buying more wheat from the Black Sea region as traditional supplier Australia battles drought. Lower prices in Russian and Ukraine and improving quality have also attracted more demand.
In recent months, Indonesia has also booked close to 1 million tonnes of Argentinian wheat for arrival between February and April.