Indonesia: Determinants of Wheat Import Demand

Stephen Magiera

No 278717, Staff Reports from United States Department of Agriculture, Economic Research Service

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.

Keywords: Crop Production/Industries; Demand and Price Analysis; International Relations/Trade (search for similar items in EconPapers)
Pages: 26
Date: 1993-11
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerssr:278717

DOI: 10.22004/ag.econ.278717

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