Indonesia's 2015 wheat imports seen flat as economy flags

By Michael Taylor
JAKARTA, Oct 6 (Reuters) - Indonesia's wheat imports for
2015 will be lower than forecast at 7.4 million tonnes, flat to
the previous year, the head of an industry group in the world's
No.2 importer of the grain said on Tuesday, as consumers cut
spending as the economy slows.
Earlier, Franciscus Welirang, chairman of the Indonesian
Wheat Flour Mills Association (APTINDO) estimated Indonesia's
2015 wheat buys at 7.8 million tonnes.
With Indonesia's second-quarter growth at 4.67 percent, the
slowest pace since 2009, Welirang told Reuters that wheat
imports for the year would be the same as in 2014 as consumers
watch what they spend.
"I see it almost the same as last year," said Welirang. "It
is an indicator of the economic slowdown," he said, although
adding that imports would rise 5 percent in 2016 as the economy
picked up again.
In the first half of 2015, Indonesia imported 3.6 million
tonnes of wheat, he said.
"We will see in the third quarter that there is an increase
in consumption of 1 percent compared with last year," he said,
noting that the annual average increase over the past 20 years
is 5 percent.
Indonesia's economy has grown at an average annual rate of
more than 6 percent since the end of the Asian financial crisis,
and the country's rising middle class has in recent years
underpinned the country's growing appetite for Western fast
foods such as McDonald's (NYSE:MCD), Dunkin' Donuts and Pizza Hut.
The Southeast Asian nation imports all of its wheat, with
about 70 percent shipped from Australia. Canada and the United
States are the other key suppliers.
Bakeries contribute just over 20 percent of Indonesia's
wheat demand, with instant noodles accounting for 34 percent,
said Welirang, who is also a director at the world's biggest
noodle maker, Indofood Sukses Makmur INDF.JK .
Indonesia also imports wheat flour but volumes have fallen
in recent years due to an ongoing trade disputes with top
suppliers Turkey, Sri Lanka and India.
Wheat flour shipments were just 48,000 tonnes during the
first half of the year, Welirang said, compared with 197,000
tonnes for the whole of 2014.
There are a total 29 wheat flour mills in Indonesia with a
capacity of 11.2 million tonnes, he said, with the number set to
rise to 31 by the first quarter of 2016.