China recovery contributes to Indonesia's rising agriculture exports

28, Oct. 2020

Photo by Anggit Rizkianto on Unsplash
Photo by Anggit Rizkianto on Unsplash

JAKARTA, NNA - Higher demand from countries like China for agricultural products such as fruits, vegetables and coffee has helped to prop up the Indonesian economy battered by the COVID-19 pandemic this year.

While other sectors underperformed, agriculture managed to record a healthy growth of 9.7 percent in the first nine months of the year although contributing only a modest 2.4 percent to overall exports, according to government agency Statistics Indonesia (BPS) figures.

Agricultural exports shot up 16.22 percent to $414 million in September. When comparing with the month before, the figure is a more impressive 20.84 percent, indicating a good recovery in demand from China, the top destination for overall exports including agricultural items.

The better agriculture performance has helped to support the total September exports which increased 6.97 percent over August.

Agricultural analyst Arief Daryanto, who is also the Dean of the Vocational School of Bogor Agricultural University, said exports of bird nest, shrimp, vegetable, clove, and black pepper have increased significantly this year.

“However, if we look closely at September 2020, the export of local fruits to China increased. They include mangosteen, which is very popular in China. Also popular from plantations are banana and coconut,” Daryanto told NNA.

He said agricultural exports would grow accordingly to the economic growth of export trading partners, particularly China.

He noted that China recently started to recover from the COVID-19 crisis and its purchasing power has increased. Coupled with improved trade connectivity between the two countries, exports to China have gone up, he said.

Kuntoro Boga Andri, head of public relations and information bureau in the Ministry of Agriculture, saw sizable increases in exports of vegetables and fruits, as well as coffee and pepper.

Although there was no emerging product trend, vegetables and peppers were fairly in high demand in September. However, the largest plantation export is still oil palm, he maintained.

During the pandemic, the Ministry of Agriculture collaborated with several e-commerce sites to support local produce, especially those geared for export.

The Agricultural Quarantine Agency also initiated cooperation with Alibaba Group Holding Ltd., a Chinese multinational technology company, to encourage the marketing of agricultural commodities by Indonesians in international markets through e-commerce.

Andri of the Ministry of Agriculture said the trend of healthier eating is also one factor for the rising demand for agricultural produce. Many farmers are also growing organic crops with good harvests which allow them to export.

The development of the tourism industry in Indonesia also saw a demand for quality produce over the decades.

The ministry sees these as growth opportunities and also feels it was high time to boost the country's food security. It is promoting innovative farming ideas to promote food independence as a key to building food security, Andri told NNA.

The government and the private sector are jointly launching more sustainable, organic, and high-tech farming projects involving a new generation of farmers too.

"In the future, the value of our agricultural exports can increase continuously if we increase the added value of our exports by further processing," said Daryanto.

According to BPS data, the top three countries receiving Indonesia's non-oil and non-gas exports in September are China, the United States, and Japan.

From January to September, China is also the biggest export partner with a market share of $20.43 billion or around 18.37 percent.

Although key exports like oil and gas, manufacturing and mining have contracted, Indonesia managed to reap a $13.51 billion trade surplus so far this year as imports plunged, according to BPS figures.