Agribusiness to Indonesia

Trends and opportunities

Indonesia infographic agritech

The market

Indonesia is the world’s fourth most populous country and amongst the world’s largest agricultural producers. Agriculture is vital to the Indonesian economy, accounting for 50 per cent of total employment (source: FAOStat, 2014) and contributing 14 per cent to gross domestic product (source: World Bank, 2014). Main export commodities include palm oil, natural rubber, cocoa beans, coffee, rice, cassava, maize, fruits and seafood.

Indonesia is an important market for Australia, receiving a substantial portion of Australia’s agricultural commodity exports valued at A$2.3 billion in 2015 (source: DFAT Indonesia Country Brief, 2015). It is the largest market for wheat, the leading destination for live animal exports (excluding seafood) and a major market for sugar and cotton.

Indonesia’s long-standing goal to reach self-sufficiency remains a top priority. Under President Joko Widodo, the country’s National Development Plan aims to boost the country’s farming capability, production and value added activities, while lessening commodity imports. Indonesia is heavily reliant on imports of grains (wheat), live cattle, meat, raw sugar, soya beans and others.

Meat and livestock        

Meat consumption in Indonesia is currently around 4.3 kilograms per capita per annum, with poultry the largest proportion of meat being consumed. Indonesia is Australia’s largest export market for live cattle and the fifth largest export market for Australian boxed beef. In 2015, Indonesia imported 618,323 head of live cattle from Australia, which was down 15 per cent compared to the previous year. Limits on meat cut imports imposed in December 2014 also decreased Australian boxed beef exports to Indonesia by 13 per cent in 2015 (source: MLA Indonesia Market Snapshot, 2016).

Revisions to the regulation provide more relaxation to box beef access to Indonesia, allowing most cuts to be imported to the market. However, the opening up of supply sources from country-based to zone-based has resulted in competition to Australia in supplying beef and live cattle to Indonesia.

Australia currently remains the major supplier of imported beef to Indonesia with 80 per cent of the market share in 2015. New Zealand is the second largest supplier with 16 per cent, followed by the US with four per cent (source: MLA Market Snapshot Indonesia, 2016).

The Directorate General of Husbandry Production is intensifying its efforts to increase livestock production by encouraging the breeding of slaughter and dairy cattle designed essentially for small-hold farmers. Improvements and further development are needed in this sector to increase national dairy production.

Market access

The Indonesian Government also has stressed their objective to increase local farming capability and to maximise value added process and operation within the country. The latest live cattle importation regulation requires 20 per cent of cattle imported by private companies to be breeding cattle and for cattle farmers to operate a breeding program. The requirement will be applied gradually with an audit to evaluate performance by 31 December 2018. 


Indonesian consumption of fresh fruit and vegetables is growing with consumers quick to seek and recognise the health benefits of fresh produce. Nevertheless, Indonesian consumption of fresh fruit is only 40 kilograms per capita, well below the level recommended by the United Nations Food and Agriculture Organisation (FAO) at around 70 kilograms per capita (source: Kafi Kurnia, Chairman, Indonesia Fruit and Vegetable Industry Association, 2014).

Indonesia imports fresh fruits and vegetables to balance inadequate domestic supply. In 2015, Indonesia total fruit and vegetable imports were valued at A$885,556 million and US$741,649 million respectively.  Australia ranked the number four export source for fruit and vegetables to Indonesia (source: ITC Calculation COMTRADE Statistics, 2015).

Market access

There are often seasonal restrictions or outright bans on produce that the government perceives can be grown domestically. Exporters need to regularly check regulations and consult with the Department of Agriculture and Austrade.

With regard to quarantine, fresh fruits and vegetables must have a Phytosanitary Certificate from the country of origin and transit country. The Indonesian Government requires cold treatment for produce coming to Indonesia originating from areas in Australia that are not free from fruit fly before and during shipment.


Indonesia remains reliant on the importation of wheat due to the country’s inability to grow the commodity in any volume. Demand continues to grow driven by retail consumption and the domestic milling industry.

In 2015, Indonesia imported 7,412,019 tonnes of wheat, with a total value of more than A$2.7 billion (source: Trade Map, 2016).  Indonesia is home to at least 31 flour mills with a total installed capacity of 11.2 million Metric Tonnes (MT) per year, with current operating of 60 – 70 per cent capacity.

Australia holds the largest market share for wheat importation to Indonesia at 57.5 per cent in value followed by Canada (25.6 per cent) and Ukraine (6.9 per cent) (source: Trade Map, 2016). This dominant share can be attributed in part to the noodle industry’s preference for Australian standard white wheat and its close proximity.

The instant noodle industry is the main consumer for wheat flour in Indonesia, consuming 60 per cent of Indonesia’s wheat flour. Bakery and industry consumption follows with 20 per cent, and commercial retail constitutes 20 per cent.

Australian wheat faces competition from the US, Canada, India and Black Sea countries. Russia and the Ukraine, which grow wheat in considerably larger volumes than Australia, are aggressively marketing lower prices, as low as US$210 per ton (US$30 cheaper than Australian wheat) (source: traders as quoted by Jakarta Globe, 2015). Millers consider Black Sea wheat a meaningful, cheaper source of wheat to be blended with Australian wheat.

Market access

Currently Indonesia’s domestically produced wheat flour meets 96.5 per cent of Indonesia’s total demand. The Indonesian Government has imposed import restrictions on wheat flour with a five per cent duty and quota.


Fisheries and aquaculture also present opportunity with total area potential for fisheries to reach to 5.8 million kilometre2 comprising three-quarters of the entire national territory (source: Indonesian Ministry of Marine Affairs and Fisheries, 2015). Indonesia is the largest producer of fishery products in South East Asia and the world’s third largest after China and India. The relatively stable tropical water temperature enables aquaculture to be carried out throughout the year.

Fisheries and aquaculture are amongst the primary economic activities by the Indonesian Government to provide a national source of protein. The value of aquaculture in Indonesian production rose from IDR 57.63 trillion in the year 2010 to IDR 75.88 trillion in 2013 with a yearly increase of 18.35 per cent (source: Indonesian Ministry of Marine Affairs and Fisheries, 2013).

Aquaculture in Indonesia is practiced in fresh, brackish and marine water using a variety of species, production facilities and methods.  Indonesia’s extensive coastline territory provides ideal conditions for farming in brackish waters, while lakes and ponds provide an abundant platform for freshwater cultivation.

Market access

Around 95 per cent of seafood producers in Indonesia are artisanal fishermen using traditional capture methods. However, only a few large state and privately owned companies have the capability to adopt commercially new technologies.

In mid-January 2016, Indonesia’s investment coordinating board (BKPM) opened downstream processing in the seafood industry to 100 per cent foreign equity.


Despite a strong agricultural base, Indonesia’s sugar industry has seen a decline in recent years owing to reduced productivity and efficiency of plantations. Sugar plantations are still dominated by smallholder plantations. Indonesia's annual sugar production is only 1.5 million tonnes.

Indonesia is able to produce various types of sugar milling equipment. However, for larger capacity mills, (for tandem production) or for advanced technology (continuous centrifugal, laser screens, etc.), Indonesia still imports equipment.

Cotton is an area of complementary trade and Indonesia's imports represent between 650,000-800,000 bales of Australian cotton each year (approximately a quarter of the entire Australian crop). The Indonesian industry adds a multiplier of eight times or more to the value of the raw commodity. Australian cotton is a key element in the multi-billion dollar export success story of the Indonesian garment and manufacturing industry.

Indonesian farming practices present potential opportunity for technology adaptation varying from water and/or irrigation management, pre and post-harvest technology to increase harvest production and quality, processing technology as well as packaging, storage and logistics management. The government is seeking significant improvements with on-farm productivity and across the agrarian supply chain especially in the use of fertilisers, seed resilience, extension of irrigation facilities, expanded technology adaptation and training for farmers and improved agrifood production technologies and systems


Areas of opportunities in the Indonesian agribusiness industry include:

Meat and livestock

  • dairy cattle and equipment
  • breeding practice, knowledge transfer for breeding programs and artificial insemination
  • technology and equipment, cages, storage system
  • breeder stock, feeder, and slaughter cattle
  • feedlot management, feeding management, meat quality improvement
  • abattoir, meat handling, and butchering equipment
  • education and training programs
  • breeding, dairy, feeder, and slaughter cattle
  • ·other meat such as offal, mutton, goat, and lamb.


  • temperate fruit varieties such as cherries, berries, summer fruits, table grapes, apple and pear, avocado, citrus, etc.
  • premium vegetables: broccoli, brussel sprouts, carrots, beet root, kale, etc.
  • plantation technology and services, modern planting, organic farming, greenhouse methodology
  • cold storage and warehouse systems
  • post-harvest, product handling, packaging and distribution management.


  • hatchery program to improve brood stock quality and increase fingerling survival and growth rates
  • contamination management
  • feed production and manufacturing
  • accine research and manufacturing
  • quality control and management
  • seafood processing that meet to export standard and quality
  • supply chain and logistics management
  • cold storage and handling
  • equipment such as filtration system, net cages, digital scale, PH metre, salinity metre, water treatment, platforming, packaging for juvenile, fresh, and seafood processed products intended for export.


  • premium fresh, chilled or frozen seafood products catering to the premium retail (supermarkets/hypermarkets) and hospitality industry
  • supply of products and services specific to the food services sector (ingredients)
  • technology transfers (e.g. packaging and establishment of processing plants), consultancy services for the development of the horticulture industry.

Competitive environment

Indonesia’s growing consuming classes have attracted significant import competition such as:  

  • Indonesia’s revision of live cattle and box beef import regulations from country based to zone based, has opened up market access to India, Brazil and Mexico.
  • Australian wheat faces competition from the USA, Canada, India and Black Sea countries. Indonesian millers continue to consider Black Sea’s wheat as a cheaper source for blending with Australian wheat in production.
  • The Indonesian Government protection favours local fruit growers by imposing seasonality restrictions. This has created unexpected and stringent competition that privileges not only local produce but also opens up the market to other northern hemisphere countries.

Tariffs, regulations and customs

Most boxed beef with the exception of boneless and selected offal incur no import duties or tariffs under the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). All agricultural products including live cattle and meat are subject to a 10 per cent Value Added Tax (VAT).  Currently, there is a semester based import quota for live cattle for countries free from foot-and-mouth disease.

ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)

The Agreement Establishing the ASEAN (Association of Southeast Asian Nations)-Australia-New Zealand Free Trade Area (AANZFTA) was signed by the then Minister for Trade and his ASEAN and New Zealand counterparts, on 27 February 2009.

AANZFTA is the largest FTA Australia has concluded. ASEAN and New Zealand together account for 18 per cent of Australia's total trade in goods and services, worth almost A$113 billion in 2012-13. AANZFTA contains regional rules of origin and substantial tariff reduction and elimination commitments, as well as World Trade Organization (WTO)-plus commitments in other areas such as services, which will provide commercially meaningful benefits to Australian business and further strengthen Australia's commercial ties with ASEAN.

AANZFTA is now in force for all 12 countries that signed the Agreement: Australia, Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam. The Agreement entered into force for Indonesia on 10 January 2012. AANZFTA for Indonesia will benefit both Australia and Indonesia. Tariffs on a wide range of Australian exports to Indonesia will reduce to zero, improving market access opportunities for Australian exporters. Indonesia will also bind existing levels of market openness in various services sectors, providing greater certainty for Australian exporters and investors

Find out more information regarding tariffs applicable to the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).  

Industry standards        

Exporters should be aware of halal requirements for frozen or chilled cut meat (beef) and also quarantine requirements for both cut meat and cattle. All meat products (except pork) exported to Indonesia and intended for human consumption must have halal certificates.

A special license from the Directorate General of Husbandry Production is required for all chilled and frozen pork products.

The main prerequisite for importing fresh produce into Indonesia is the procurement of a phytosanitary certificate issued by the appropriate authority such as the Department of Primary Industries in the country of origin. The consignments are subject to plant quarantine inspection upon arrival in Indonesia.

For those wishing to operate in the Indonesian market the problem of under-invoicing is an issue that must be addressed. Under-invoicing is done frequently at the request of the local importer in their attempt to reduce tax payments. The practice is illegal as it avoids Indonesian import duty payable on the full or real value of the products.

This practice is common and Australian exporters have reported loss of orders for non-compliance. Australian companies should be wary of this and exercise due diligence and seek further advice before agreeing to any practices which may hinder their activities in the market.

Marketing your products and services

Market entry

To take advantage of the opportunities that the Indonesian agricultural industry offers, it is imperative that companies have active marketing strategies such as:

  • Appointing the right business partner (after due diligence work has been undertaken)
  • Visiting the market regularly as face-to-face business
  • Preparing comprehensive information packs, profiling your company, product specifications, pricing and terms
  • Participating in major trade exhibitions such as the Food, Hotel and Tourism Indonesia exhibitions (for meat products and processed food products)
  • Promoting the Australian image of clean and green agricultural products with highest quality and international standards.

Consistent quality, timely delivery and competitive pricing are essential if Australian suppliers are to ensure an increased market penetration and popularity of Australian products in the Indonesian market.

Marketing and promotional activities in Indonesia vary dramatically. Some options include direct marketing (mail-out and/or fax-out), product/company launches that are usually held at key venues (e.g. five-star hotels), and advertising with the local media (TV, radio, newspapers). Television advertising is very expensive so most companies prefer to conduct newspaper advertising.

Distribution channels

The major importers have their own distribution networks and cold storage facilities. For areas outside Jakarta, importers often have their own branch offices or appoint local distributors. Most of the business is done through the Jakarta office, with the branches usually located in major cities such as Medan, Surabaya and Denpasar (Bali). Mark-up for imported products is generally 10 per cent from the importer to the distributor. Price mark-up beyond the distributor varies, depending on the market conditions, such as product availability.


Agribusiness products can enter Indonesia via air or sea depending on the commodity, quantity and urgency. The shipment can take between five to eight days for shipping and same day for air transport. Australian exporters should contact shipping companies for further information on shipping rates and requirements from Australia to major ports around Indonesia.

Live cattle exporters need to form a direct relationship with feedlot companies or slaughtered cattle importers. Main destinations in Indonesia for livestock are Jakarta, Lampung, Cilacap and Surabaya.

Links and industry contacts


Australian resources

Australian Exporters Livestock Council (Livecorp)  
The Australian Federation of Islamic Councils Inc. (AFIC) 
Horticulture Innovation Australia 
Meat and Livestock Australia 

Indonesian resources

Directorate General of Customs and Excise 
Indonesia Investment Coordinating Board
Ministry of Agriculture 
Ministry of Trade 
National Agency for Export Development 
National Single Window 
Statistics Indonesia 


Industry and Business Associations

Indonesian Cattle Farmer Association (GAPUSINDO):
Indonesian Fruits and Vegetables Exporter and Importer Association (ASEIBSSINDO):
Indonesian Wheat Flour Producer Association (APTINDO): 
National Meat Processor Association Indonesia (NAMPA):

Chambers of Commerce

Australian Indonesian Business Council 
Indonesia Australia Business Council AIBC 
Indonesian Chamber of Commerce and Industry 


The Jakarta Globe 
The Jakarta Post 
Tempo Interaktif 

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

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