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Indonesia Dairy Imports to Grow

24 October 2012

INDONESIA - Dairy imports into Indonesia are set to increase, due to political stability, continued economic growth, per capita consumption growth, increased consumer health awareness, and an increasing capacity for local diary and food processors.

The Organization of Economic Cooperation and Development (OECD) estimates that Indonesia’s gross domestic product (GDP) will grow by 6.0 per cent in 2013. This, combined with Indonesia’s stable political climate, stronger per capita consumption of milk, and greater awareness of the health benefits from dairy products will continue to provide opportunities for the Indonesian milk processing industry. Some of the major dairy manufacturers are expanding their capacity.

As a result, the Indonesian dairy industry is currently growing at an annual rate of eight to 10 per cent. Per capita consumption of milk remains below consumption rates of neighboring countries, as milk and other dairy products are cost prohibitive for many Indonesian consumers. Parents usually prioritize buying milk products for their infants, toddlers, and children who need the best nutrients for their growth. Adult Indonesians generally do not include dairy products in their daily diets.

Although several major dairy farms are expanding their dairy herds, Post expects that the overall growth in domestic fresh milk production will remain limited. Currently in Indonesia, locally produced whole fresh milk is typically mixed with imported milk powder, with Oceania being the preferred supplier due to closer proximity. Less competitive prices, especially over the last three months, have led to lower levels of US NFDM exports to Indonesia in CY 2012. The increased use of whey by Indonesian food manufacturers drives higher imports of whey from the United States.

Further Reading

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