A wheat harvest in Salaran, Getasan, Semarang, Central Java on September 8. 2016. (Antara Photo/Aloysius Jarot Nugroho)

Russia-Ukraine Conflict May Affect Indonesia’s Wheat Supply

BY :JAYANTY NADA SHOFA

MARCH 02, 2022

Jakarta. Indonesia’s wheat supply may suffer from the ongoing Russia-Ukraine conflict, given that the Southeast Asian country is heavily dependent on wheat imports from Ukraine.

According to the think tank Center for Strategic and International Studies (CSIS), the two countries might not be Indonesia’s major trading partners for import or export. But the conflict will have an effect on Indonesia's food ingredient imports, particularly Ukrainian wheat.

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“About 75 percent of Indonesia's imports from Ukraine are cereals, which include wheat. Followed by iron and steel at 23 percent. Then other commodities at 2 percent,” Lestary J. Barany, a research assistant at the economics department of CSIS, told a virtual conference on Wednesday.

Wheat is a key ingredient for noodle, flour and bread producers.

“Ukraine is Indonesia’s top wheat supplier. But many of its wheat granaries are in the eastern region, which is in close proximity to where the Russian troops have been deployed. So the threats on the supply side are increasingly felt,” Lestary added

At the same time, Indonesia is seeing an increase in flour consumption, according to Lestary.

Indonesian Flour Producers Association (Aptindo) reported that the domestic flour consumption rose 4.6 percent in 2021. Aptindo attributed this growing consumption to economic recovery and growth of flour-based culinary businesses or bakeries. 

“Russia and Ukraine may not be Indonesia’s top export destinations, but the conflict will have an impact on Indonesia’s food ingredient imports,” Lestary said.

UN Comtrade data shown during the conference revealed that Indonesia’s imports from Ukraine reached $963.06 million in 2020. Indonesia’s imports from Russia totaled $957.89 million in the same year. These figures placed Ukraine and Russia as the 19th and 21st, respectively, in terms of the leading import source for Indonesia.

Also in 2020, Indonesia’s exports to Russia were $973.82 million. This was much higher than what Indonesia had exported to Ukraine, which was worth $223.92 million. So Russia and Ukraine ranked 29th and 41st, respectively, when it comes to Indonesia’s largest export market.

The National Statistics Agency (BPS) data shows that Ukraine was also Indonesia's largest supplier of wheat and meslin in 2020. Ukraine supplied 2.96 million tons of wheat and meslin to Indonesia that year. Followed by Argentina with about 2.63 million tons. Indonesia only imported about 830,836 tons from Australia in 2020.

But last year, most of Indonesia's wheat imports came from Australia.

Aptindo data, as reported by news outlet Kontan, showed that Indonesia bought 4.69 million tons of wheat from Australia in 2021. Wheat imports from Ukraine reached 3.07 million tons in the same period.

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