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Indonesia: Determinants of Wheat Import Demand

Author

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  • Magiera, Stephen

Abstract

Indonesia does not produce wheat, and imports have risen rapidly. However, U.S. wheat exports to Indonesia fell from 850,000 metric tons in 1983 to near zero in 1991. This was due to Australian transport and price advantages in the Indonesian soft wheat market and the entry of several new exporters in the market for hard wheat. Canadian exports have also risen in recent years. The Indonesian market for wheat and wheat flour is highly regulated. As a result, the quality needs of flour users are not reflected in market signals. This limits the role of quality in import decisions. Indonesian millers complain about dockage in U.S. wheat because of its effect on milling rates and profits. However, Indonesia would not pay a premium for cleaner U.S. wheat. Given the price discounts currently offered by competitors, it is unlikely that Indonesia would purchase more U.S. wheat if it were cleaner.

Suggested Citation

  • Magiera, Stephen, 1993. "Indonesia: Determinants of Wheat Import Demand," Staff Reports 278717, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278717
    DOI: 10.22004/ag.econ.278717
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