Indonesia Dairy Market Overview
Indonesia is rising as a significant player in the Southeast Asian dairy market. This growth is bolstered by strategic government initiatives, international partnerships, and increased investments, maintaining the industry's upward trajectory.
Dairy Cattle and Milk Production
Annually, Indonesia supports approximately 600,000 dairy cattle, resulting in a substantial milk production volume of around 950 million liters. This capacity is pivotal in catering to both domestic and export demands.
Milk Processing
With advancements in its milk processing capabilities, Indonesia processes approximately 700 million liters of milk each year. This significantly impacts both local consumption and the global market.
Cheese, Milk Powder, and Whey Production
Cheese production in Indonesia, though in its nascent stages, has reached roughly 5,000 metric tons annually, showing strong growth potential. The country also produces about 20,000 metric tons of milk powder and 7,000 metric tons of whey per year, essential for both domestic consumption and export opportunities.
Key Dairy Enterprises
- Indolakto
- Frisian Flag Indonesia
- Greenfields Indonesia
- Cimory
Leading Dairy Farms
- PT Ultra Jaya Milk Industry Tbk
- PT Greenfields Indonesia
Exports and Imports
Indonesia has experienced a near doubling of dairy exports, with a 98% increase in recent years. Despite this uptick, imports are high, at about 3 billion liters annually, primarily milk powder and various cheese types.
Significant Market Events
- Government Initiatives: Policies aimed at supporting local farmers and improving production efficiency.
- International Partnerships: Collaborations with global firms for technology transfer and production improvement.
- Investment Surge: Increased investments for expanding processing facilities and modernizing farms.
- Consumer Demand: Health-conscious trends driving industry growth.
- Presidential Initiatives: Proposals for free meals in schools and for pregnant women to boost dairy consumption.
- International Collaboration: Partnerships with countries like Nigeria to enhance dairy and livestock capabilities.
- Protests: Farmer protests against government milk procurement policies in East and Central Java.
- Free Nutritious Meals Program: Encouraging locally sourced milk to reduce import dependence.
Key Developments
The Indonesian dairy sector is on a growth path, supported by investments and governmental backing. Efforts are underway to improve farmer-industry cooperation to enhance production quality and sustainability. However, challenges include achieving dairy self-sufficiency amid evolving import conditions. The country also plans to import 200,000 dairy cattle by 2025 to boost milk production. Developments like these, alongside programs to combat malnutrition, are expected to bolster the industry.
Other notable events involve Indonesia's importation of dairy cattle, allegations against Fonterra regarding palm kernel use, and strategic partnerships like PT ABC Kogen Dairy's collaboration with Morinaga Milk Industry Co. Additionally, Nestlé targets Indonesian consumers with its Nescafé RTD cold coffee products. Greenpeace Aotearoa activists disrupted efforts to unload palm kernel shipments, while higher US tariffs pose challenges for Indonesian competitors.
The country has secured crucial investment deals with the UAE in energy and dairy sectors, and Indonesian nutrition plans could mean increased demand for New Zealand dairy products. Brenntag is distributing Arla Foods Ingredients’ extensive portfolio of protein ingredients in Indonesia. The expanded collaboration includes categories like health foods, infant nutrition, and sports nutrition.
As a key producing country of coconut oil, unfavorable weather conditions in Indonesia have contributed to supply shortages.
Modified: 2025/05/18