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USDA International Egg and Poultry

27 March 2013

USDA International Egg and Poultry: IndonesiaUSDA International Egg and Poultry: Indonesia

With over 248 million people, Indonesia is the world’s fourth most populous country and home to the world’s largest Muslim population. It is the largest economy in Southeast Asia.
USDA International Egg and Poultry

Indonesia has self-sufficiency goals for poultry and beef. Protectionist policies on poultry (de facto ban on imports) and beef (import quota) are major trade barriers, while domestic production struggles to keep up with demand. Indonesia’s per-capita consumption of beef and poultry is well below neighboring countries and the expanding middle class points to strong growth potential. The country’s total poultry consumption is expected to double in 10 years.

2009 Food Supply Quantity (kg/capita/yr), in Select Countries

Source: FAOSTAT|© FAO Statistics Division 2013 | 18 March 2013

Indonesia is an important market for U.S. feeds and fodders. U.S. exports have nearly doubled in just five years, led by corn gluten meal, meat and bone meal (MBM), distillers dried grains with solubles (DDGs), and prepared poultry feeds. The Indonesian poultry sector accounts for over 80% of total feed demand. Feed mills rely heavily on imported feed ingredients, especially protein meals, additives, and DDGs, for which U.S. supplies are competitive. Indonesia is the largest market for U.S. MBM. Recent trade restrictions on U.S. MBM are expected to be temporary, as the country simply cannot supply enough feed for its bourgeoning poultry sector.

Indonesia has one of the highest growth rates in retail food and beverage sales among developing countries. While traditional retail venues, such as wet markets and small food stalls, still account for 85% of grocery sales, modern retail stores have been growing much more robustly, expanding share of grocery sales from 5% in 1999 to 15% in 2011. The number of modern retail outlets increased 13% in 2011 alone, as many start to reach second- and third-tier cities. Modern retail outlets are well suited for introducing imported products, including perishable items and high-value consumer-oriented products. Chicken meat could become a major U.S. export if Indonesia lifts its de facto import ban.

Indonesia’s World Ranking in Production, 2011

Source: FAOSTAT | © FAO Statistics Division 2013


Indonesia Poultry and Egg Trade in Metric Tons

*=Unoffical figure, F=FAO estimates


Indonesian Broiler Meat Production and Demand

Source: FAPRI-ISU 2012 World Agricultural Outlook
Please note that the Outlook is based on data from November 2011 and does not include the drought the U.S. experienced in 2012.

United States Challenges Indonesia’s Import Restrictions on Horticultural Products, Animals and Animal Products

On January 10, 2013 the United States requested consultations with Indonesia under the dispute settlement provisions of the World Trade Organization (WTO) concerning trade-restrictive measures applied to horticultural products, animals, and animal products. Those consultations unfortunately did not resolve the dispute.

Concerning animal products, in the complaint the U.S. said Indonesia imposes a non-automatic import license regime and quotas for animals and animal products pursuant to which an importer must complete multiple steps prior to importing an animal or animal product into Indonesia. These steps include, first, importers must receive an Import Approval Recommendation ("RPP") from the Ministry of Agriculture to import animals or animal products. After receiving the RPP, the importer must then apply for an import license with the Ministry of Trade. The Ministry of Trade only allows the importation of the product if, among other factors, domestic production and supply of the product do not meet "demand for public consumption at reasonable price." Indonesia's government sets the quotas for animals and animal products twice a year. The Ministry of Agriculture allocates the quotas, specifying the quantity of each animal and animal product allocated to each importer.

Through its measures establishing and administering these nonautomatic import licensing requirements, Indonesia appears to have acted inconsistently with several of its WTO obligations, including under the General Agreement on Tariffs and Trade 1994 (GATT 1994), Agreement on Import Licensing Procedures, and the Agreement on Agriculture.

Under WTO dispute settlement procedures, the United States and Indonesia would normally consult within 30 days. The United States hopes that these consultations will produce a satisfactory result. If they do not, the United States has the right, after 60 days from the request for consultations, to request that the WTO establish a dispute settlement panel to examine the matter.

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