The agriculture sector of Indonesia has witnessed an increased demand for wide varieties of seeds. Having vast and abundant fertile soil has made Indonesia being considered amongst the major agricultural countries in the world. As per the Ministry of Agriculture, Indonesia grows 77 types of carbohydrate-rich produce, 26 types of beans, 389 types of fruits, 228 types of vegetables and 110 types of spices. An increased focus of introducing hybrid seeds by the domestic and global players in the space has significantly supported the market revenues over the recent past. Rising demand for staple food crops including rice and corn has resulted in revenues growth from the increasing sales of seeds in the market. Major crops which have supported the demand for seeds during 2016 were onions, potatoes, rice, corn, soybean, palm oil, tomatoes, chilies, green beans, cassava, sweet potato, rubber, coconut, coffee and cocoa.
Grains and cereal seeds dominated the market share to the overall revenues generated from sales of various types of seeds in Indonesia. The initiative of the government to make Indonesia a self-sufficient corn nation led to increased volumes of corn seeds being sold, thus making grains and cereals acquire a dominant position in market revenues during 2016. Indonesia is the largest palm oil producer in the world and the expansion in oil palm plantation area in the country has triggered the growth of revenues from sales of plantation crop seeds during 2016. The islands of Indonesia had about 11.3 million hectares of land under palm oil cultivation during the same year.
Rice is the staple food of Indonesia and has dominated the overall revenues generated by consumption of various types of grains and cereals seeds in the country during 2016. Indonesia has the largest per capita rice consumption in the world with Indonesians consuming around 140 kg of rice per person per year. Indonesia is amongst the top five rice producing nations in the world and produced 79.2 million tons of the final products during 2016. The surge in usage of hybrid seeds for corn production has supported the market revenues. Tempeh and tofu are major by-products of soy and provide lowest cost staple protein to the country’s population.
Indonesia has been the largest producer of palm oil in the world. The dominance of the country in global palm oil production resulted in maximum revenues being generated from sales of palm oil seeds during the same year.
Indonesia produced about 3.2 million tons of rubber during 2016 and exported majority of it to the USA, China, Japan, Singapore and Brazil. Indonesia’s manufacturing industries; especially the automotive sector has been the major end user for domestically produced rubber. The country produced 350,000 tons of cocoa during 2016 and witnessed an incline in the consumption of cocoa seeds during the same year.
Prohibition on the imports of Granola potatoes, which are planted by most local farmers, surged the sale of potato seeds in the country during 2016. Rising exports of Indonesia green beans to customers in Hong Kong further boosted the production of crop in the country, thereby resulting in rising demand for green been seeds.
The rising trade of cassava for producing food items, glucose, solvents, alcohol, animal feed, fertilizers, energy and other by-products within and outside the islands of Indonesia. Of all the major fruits and vegetables grown in Indonesia, the sweet potato is a nutritious staple for the people in the Papua region. The revived cultivation of sweet potato across various regions of Indonesia resulted in offering ten varieties of the yield.
The seed market in Indonesia is highly competitive due to large number of domestic and global players offering a wide variety of seeds in the country. The market is dominated by the unorganized players which cater to the needs of the farmers to meet the growing demand for various food crops in the country. However, organized domestic and global seed market players operating in Indonesia have a dominating share merely in the sales of vegetable seeds. There are various factors on which the seed providers compete amongst each other. Some of the major factors include price of seeds, the type of seeds offered, distribution network and reach of the market players, and continuous research and development for introduction of new seeds in the country. Major organized players offering grains and cereals seeds in the country were PT Bisi International Tbk, PT DuPont Indonesia, PT Syngenta Indonesia and Monsanto Indonesia. Players which dominated the revenues from plantation crops seeds included PT SMART Tbk, PT Astra Agro Lestari Tbk, PT Eagle High Plantations Tbk and PT Sampoerna Agro Tbk. The revenues from sales of fruits and vegetables seeds were driven by PT East West Seeds Indonesia and PT Bisi International Tbk.
The demand for seeds in the country is expected to be driven primarily by the new strategic plan of the Ministry of Agriculture for 2015-2019. The emphasis on achieving self-sufficiency by increasing the production of corn, soybean, chili, onions and other major food crops during the outlook period is anticipated to boost the revenues of the players offering seeds for producing crops in Indonesia. The continuously growing population of the country is anticipated increase the demand for staple foods including rice and corn, leading to cultivation of more crops. The market is also expected to benefit from the increasing middle class population in Indonesia, which is projected to boost the demand for fruits and other horticulture crops. Indonesia seed market is anticipated to become highly competitive, with organized players gaining significant market share on the back of their strong R&D and financial strength. This is envisioned to boost the revenues of the players offering new and improved seeds in the country.
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