Australian & Indonesian grains to flourish

By September 5, 2018 September 6th, 2018 Media, Media Releases, Media Releases - September 2018

GrainGrowers today congratulated the Australian Government for the progression and conclusion of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

“Indonesia is a country of boundless opportunity for the Australian grains industry,” said CEO David McKeon.

“A country with 263 million people, Indonesia is forecast to grow to 295 million by 2030. It will become the world’s third largest economy by 2050,” he said.

“Indonesia is already Australia’s largest wheat market, valued at roughly $1.3 billion with trade volumes around 4.2 million tonnes per year, and wheat is already Australia’s single largest export to Indonesia.”

Mr McKeon said that currently Australia’s grain trade to Indonesia was almost exclusively wheat for milling purposes, however, IA-CEPA would directly allow more diversity and growth in Australia’s grain trade with Indonesia in the future.

He said that GrainGrowers, on behalf of Australian grain farmers and the broader industry, had been working tirelessly with the Australian Government to ensure that grains was central to the trade agreement.

“We are thrilled with the outcome and the benefits this new trade agreement will provide to Australian grain growers and the broader industry,” Mr McKeon said.

“IA-CEPA will provide a platform for further growth in milling wheat trade, and will allow for improved diversity in grains trade between the two countries. IA-CEPA will not only boost opportunities for the Australian grain industry, but will also support growth, development and trade opportunities for Indonesia’s food manufacturing, stockfeed and livestock sectors”

Mr McKeon said that thanks to IA-CEPA, Australia would now have access to the rapidly growing Indonesian feed grain market with a new 500,000 tonne duty-free tariff rate quota for Australian feed grains, including feed barley, sorghum and feed wheat.

“This will provide distinct advantages to Australian grain farmers over rival grain exporting countries. These new opportunities for Australian feed grains will also help boost development of Indonesia’s livestock, poultry and aquaculture industries, while complementing the existing strong trade in milling wheat between the two countries.”

“GrainGrowers is equally pleased that Indonesia and Australia will start to work on a grains-specific economic cooperation initiative, dubbed the Indonesia-Australia Strategic Grains Partnership. The partnership will provide the required technical, economic, and social programs to allow the grains and related industries in both countries to flourish.”

GrainGrowers’ Trade and Economics Manager, Luke Mathews acknowledged the efforts by the government in pursuing a high quality agreement with Indonesia, and looked forward to the official signing of the agreement and subsequent ratification by both countries, as soon as possible.

Mr Mathews said IA-CEPA would cement the existing relationship between Australian and Indonesian milling wheat industries while allowing new trade, investment and relationships to flourish between Australia’s grain industry and Indonesia’s food manufacturing, stockfeed and livestock sectors.

Key facts on the Indonesian grain market

• Indonesia is Australia’s largest wheat trading partner, valued at  about A$1.3B and equating to approximately 20 per cent of Australian wheat exports.

• Wheat is the single largest Australian agricultural export to Indonesia with about 40 per cent market share.

• Australia’s existing grain trade to Indonesia is almost exclusively wheat for milling purposes. IA-CEPA will allow access for Australian feed grains into Indonesia.

• Indonesia’s feed grain (stockfeed) consumption is estimated at 18 million tonnes in 2017, and is growing by 1.1 million tonnes per annum.

• The Indonesia-Australia Strategic Grains Partnership is designed to bring together Indonesian and Australian decision-makers from government and industry to foster relations and to maximise the opportunities for development and collaboration amongst the Indonesian and Australian grains, food processing and livestock sectors.

• The partnership will support Indonesia’s value-adding and export opportunities in the flour milling; food processing; stockfeed manufacturing; animal/aquaculture production; and meat processing sectors.

For more information about Indonesian market, please contact Luke Mathews luke.mathews@graingrowers.com.au 

MEDIA CONTACT:

Chris Walker
P: 0408 014 843
E: chris.walker@graingrowers.com.au