Aussie wheat trade to Indonesia down 66 per cent

Drought has seen Australian wheat exports to Indonesia plummet – but our biggest customer is looking forward to the day it’s back again.

AUSTRALIAN wheat exports to Indonesia have plummeted 66 per cent in two years, as ongoing drought forces the ­nation’s biggest customer to look elsewhere.

It comes amid expectations of another dire season in Australia, as ABARES predicts wheat production to decrease another 8 per cent this year, down to 15.9 million tonnes.

But Indonesian millers insist Australian product will again be in high demand once conditions improve and supply returns to normal.

“In terms of quality, we still prefer Australian wheat,” ­Bogasari Flour Mills’ Adi Witono said.

“Our consumer requires the white colour, and Australia is number one at providing the white wheat.”

Indonesian wheat imports reached 11.4 million tonnes in 2017, 5.1 million of which was sourced from Australia. But Australia’s share dropped to 2.4 million in 2018 and just 822,410 last year, knocking Australia back from first place to fifth.

The shortfall has been made up by increasing imports of cheaper product from Ukraine, Canada, the US and Argentina.

Bogasari, the largest integrated flour mill in Indonesia and part of the Indofood group, previously used Australian wheat in about 60 per cent of its range of seven branded products.

Now, Mr Witono said, the pricier Aussie wheat was reserved for just two, more premium product lines.

Mr Witono said the quality, and cheaper and shorter shipping, meant Australian product would remain desirable, particularly as Indonesian wheat consumption was ­expect­ed to further increase from 24kg per capita.

Under the newly minted Indonesia-Australia Comprehensive Economic Partnership Agreement, Australia will be the first country to also have access for feed grains, starting at 500,000 tonnes duty-free.

GrainGrowers chair Brett Hosking said the deal was a “real win” for Australian growers, who were already sending about 20 per cent of exports to Indonesia.