Shipments expanded more than threefold over the past two decades to 7.1 million metric tons in 2012-2013, analyst Pawan Kumar wrote in a report received today. Imports of more than 10 million tons would place Indonesia, which can’t grow the grain locally because it’s too hot and humid, on par with the current leading global importer, Egypt, Kumar wrote.

Increased shipments would benefit exporters including Australia, the world’s fourth-biggest wheat supplier, as well as the U.S. and Canada. Indonesia, the world’s largest sugar buyer and second-largest palm oil user, is consuming more agricultural commodities after the economy more than doubled since 2007. Rising wheat imports may also help Indonesia to meet its goal of maintaining self-sufficiency in rice, Kumar said.

“Driven by economic growth and convenience, wheat consumption is on the rise in Indonesia,” Kumar said, forecasting rising demand from both low- and high-income groups as buyers turned to muffins and sandwiches. “Bread has become increasingly popular among industrial workers.”

Indonesia will be the world’s fourth-largest buyer in 2013-2014, boosting imports 0.8 percent to 7.2 million tons, according the U.S. Department of Agriculture. Egypt will be the largest, taking 10.5 million tons, ahead of China’s 8.5 million tons and Brazil’s 7.4 million tons, USDA data show.

Biggest Suppliers

Australia accounted for 71 percent of Indonesian wheat imports in 2012, with trade supported by a so-called freight advantage, according to Kumar. Canada and the U.S. were the second- and third-largest suppliers, Rabobank said.

Wheat consumption in Indonesia is about 26 kilograms per person a year compared with the global average of 76 kilograms, Kumar wrote. That difference provides opportunities for increased consumption in the country, he said.

“With the introduction of more wheat-based products over the years, such as instant noodles, wheat has become a competing staple to rice,” Kumar said. “The higher degree of wheat consumption has helped Indonesia keep rice self-sufficiency above 90 percent in recent years.”

Indonesia’s rice surplus means there’s no need for imports this year, according to Sutarto Alimoeso, the president director of Bulog. The state food agency had enough rice stockpiled to cover the country’s subsidized-rice program for eight months, Alimoeso said in an interview in January.

To contact the reporter on this story: Jake Lloyd-Smith in Singapore at jlloydsmith@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

http://www.bloomberg.com/news/2014-03-05/indonesians-buying-bread-to-spur-wheat-imports-on-egyptian-scale.html

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