A Promising But Volatile Market

Indonesia’s fruit and vegetable consumption is growing, but not fast enough

A Promising But Volatile Market

Each indonesian eats an average of 40 kilogrammes of fresh fruit and vegetables per year, according to a survey by the Indonesian Statistics Bureau, well below the recommended level set by the United Nation’s Food and Agricultural Organization amount of 70 kg per year.

Part of the blame can be put on a farming industry that doesn’t produce enough to meet demand. But a relatively closed market for the fruit and vegetable trade backed by a government keen to protect the country’s small hold farms also doesn’t help.

Still, imports of fruit and vegetables are growing. In 2011, Indonesia posted horticulture imports – made up of fruit and vegetables – worth US$1.7 billion, of which 18 percent was garlic and onions, and 45 percent was fresh fruit. Fruit imports in the decade to 2010 rose 235 percent, while vegetable imports rose 94 percent. China, the world’s largest producer of fruit and vegetables, is both Indonesia’s biggest target market for its export as well as its importsource. Other leading sources of import are Thailand, USA and Myanmar.

Most of Indonesia’s fruit imports, especially apples, come from China, although the country also buys oranges from Australia. Oftentimes, imported “horticultural” products are both cheaper, and viewed as of higher quality than what is grown within the country.

While domestic fruit and vegetables can be expensive – thanks to the lack of largescale farming employing modern techniques – imports face challenges.

The Indonesian government often bans the imports of certain fruit and vegetables to protect what is grown by the around 41 million small-hold farms in the country. In fact, agriculture accounts for almost 40 percent of the country’s employment, although it contributes to a small portion of the country’s gross domestic product, which is dominated by mining.

There are supermarkets and hypermarkets in urban centres, with Modern Grocery Retail (MGR), Carrefour, Matahari and Circle K among the most active retailers. Some fruit and vegetables that have faced import bans in recent years include durians, pineapples, and cabbages and carrots. In August last year, Indonesia introduced a new rule stipulating that apart from chilies and fresh shallots, 80 percent of horticultural products can only be imported at certain times of the year, with approvals required.

Indonesia’s farmers and traders do not charge high prices for their produce, because they lack modern transportation methods that use refrigerated containers and cold storage. The government has to take the initiative in this area if its objective is to assist the agricultural industry.

It’s a sign of the frequent government changes that in its website, the Australian Department of Agriculture noted in October that “Given the continuous changes occurring with Indonesia’s regulations governing horticulture products, we highly encourage exporters to stay in contact with their importers in Indonesia for specific advice about exporting all horticulture products to Indonesia.”

Government bans have also gone the other way, with Indonesian exporters facing limits as a way to ensure that food grown in the country is kept at home. The Indonesian government has many times banned fruit and vegetable exports. The country’s most popular fruit exports are of nuts like coconuts and cashew nuts.

“The market is therefore highly promising for both local and foreign producers; however, the country’s reliance on imports is highlighting the declining competitiveness of Indonesia’s domestic horticulture sector, as well as the government’s moves towards more protectionist and restrictive trade policies,” notes the Global Business Guide for Indonesia.

Indonesians consume local produce, such as rambutan, salak, also known as snake fruit for its reddish-brown scaly rough skin, and mangosteen. But increasing urbanization and a growing middle class are making nontraditional fruit like cherries increasingly popular.


A Colossal Waste

india is the world’s second largest producer of fruits and vegetables after China. It contributes

Size Isn’t Everything

Officials in china’s Ministry of Agriculture may cheer the country’s huge vegetable and fruit production

A Billion Dollar Business

Tropical thailand is blessed with an abundance of fruit and vegetables. The kingdom earns a billion

Manila Punches Below its Weight in Selling Sunshine Fruits

The philippines is asia’s top exporter of the so-called sunshine fruits, namely the mango, banana

A Promising But Volatile Market

Each indonesian eats an average of 40 kilogrammes of fresh fruit and vegetables per year, according

Selling the Family Jewels

Political turmoil and instability is robbing Egypt of its top revenue earner, tourism. The number