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Indonesian Wheat Supplies Ample for Ramadan
Lewa Pardomuan & Yayat Supriatna | July 13, 2011

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Indonesia has ample wheat stocks ahead of the festive season and will only turn to grains from India as a last resort, the executive director of the Indonesian Wheat Flour Mills Association said on Wednesday.

Indonesia’s current wheat grain inventory was estimated at 1.5 million metric tons, enough for three months of consumption, which includes the high-demand period during Ramadan in August and the Idul Fitri festivities, said Ratna Sari Loppies. Imports this year are expected to rise by 9 percent to 6 million tons from 2010, she said.

“There’s no supply problem ahead of Ramadan. Stocks are O.K.,” Ratna said. “Imports from India may be possible, but it’s not a priority because of quality concerns. As far as I know, Indian wheat is not very good.”

India has agreed to allow one million tons of common rice exports and an unspecified amount of wheat, government sources said on Monday.

“Also, most people have signed long-term contracts, so it’s not easy [to shift to Indian imports],” she added.

US wheat futures ticked lower on Wednesday after a strong rally, with September wheat falling 1-1/2 cents to $6.70-1/2 a bushel.

Indonesia, which relies entirely on imports for its wheat, gets around 60 percent of supplies from Australia. Canada and the United States accounted for about 30 percent.

Ratna expected Indonesia’s wheat grain imports to rise to around 6 million tons in 2011 from 5.5 million tons last year due to growing national demand.

“This is due to growth in the biscuit industry, which is using wheat as raw material. Demand for noodles is also high. We are seeing demand coming mostly from rural areas,” she said.

Indonesia is set to overtake Japan this year as the top wheat importer in Asia, as higher incomes also spur demand for fast food, helping to support world prices.

Indonesia has 15 flour mills, up from only four in 2000.

Reuters