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Indonesia Agriculture 2011 Hot Sector

|Includes: VanEck Vectors Indonesia Index ETF (IDX), IF

Indonesia’s Agricultural sector is set to have strong growth in 2011.

Indonesia expects output of key plantation crops, including palm oil and rubber, to increase next year on the back of expanded acreage, improving yields and expected good weather, a senior agriculture official said on Thursday.

An unusually long rainy season this year has wreaked havoc on most of the country’s plantation crops, tightening supply to global markets and driving up prices of rubber and palm oil.

Palm oil production from the world’s top producer is expected to increase by 5.3 pct to 24.43 million tonnes in 2011 from an estimated of 23.2 million tonnes this year, said Gamal Nasir, director general of plantation crops at the agriculture ministry, in an end-year news conference.

The country’s rubber production is forecast to grow by 1.12 percent to hit 2.711 million tonnes in 2011 from an estimated 2.681 million tonnes this year, he said.

A hybrid rice technology cooperation project was officially launched by China and Indonesia in Jakarta, the capital of Indonesia on Dec. 29.

Zhang Qiyue, Chinese ambassador to Indonesia; Haryono, director-general of the Indonesian Agricultural Ministry’s Research and Development Section; Chen Peng, president and director of Yuan Long Ping High-Tech Agriculture and others attended the launch ceremony.

The start of the research, which was a signal of improving relations between the two countries, was overseen by representatives of Indonesia’s Agricultural Ministry and Yuan Long Ping High-Tech Agriculture, one of China’s well-regarded crop varieties development firms, and presided over by Zhang.

The program is designed to be in effect for three years, starting from April this year and ending in 2013.

Referring to two hybrid rice strains brought to the ceremony site, Chen said the two strains were developed by Yuan Long Ping and particularly designed for Indonesian natural terrain.

“These two strains feature higher yield — much higher than most on the Indonesian market — and better quality. They are the achievement of our plan to develop particular stains of rice for Indonesia,” he said.

ndonesia expects production of white sugar to increase by nearly 70 and rice by a more modest 4.3 percent next year on the back of improving yields and expanded acreage, the agriculture minister said on Wednesday. Prolonged wet weather this year reduced production of the country’s key agriculture commodities and forced south-east Asia’s biggest economy to import rice and white sugar to bridge an anticipated shortfall.

Indonesia expects to produce 3.87 million tonnes of sugar next year, up from a downward revision of 2.3 million tonnes this year, agriculture minister Suswono told an end-of-year news conference. “Rains have sharply reduced sugar content this year leading to lower production, but we will work hard to achieve self-sufficiency in sugar by 2014,” said Suswono.

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