Market Trends of Indonesia Seed Industry
Increase in Demand for Feed Grains Boosting the Market
Advancements in seed technology, including the development of genetically modified seeds and increased hybridization rates, have bolstered the seed industry's growth. For example, in August 2023, PT. Bayer Indonesia introduced the herbicide-tolerant genetically modified corn variety Dekalb DK95R in Banggo Village, Indonesia. This new variety has the potential to boost yields by up to 30% over conventional methods. Genetically modified (GM) seeds have proven advantageous, enhancing crop yields and fostering resilient varieties. The integration of gene modification in these seeds has not only improved yields but also propelled the growth of the GM seed market. For the first time, Indonesia's Ministry of Agriculture (MOA) has introduced post-monitoring guidelines for the commercial cultivation of genetically engineered (GE) crops under Regulation No. 50/2020.
In 2021, Indonesia greenlit the planting of GE drought-resistant sugarcane, a product of collaboration between state-owned PTPN 11 and Jember University. However, this was restricted to PTPN 11's land, with no seeds available to other farmers and a potential reach of 30,000 ha. In September 2022, the Indonesian government, alongside the Ministry of Economic Affairs, urged farmers to adopt superior genetically modified (GM) soybean varieties to bolster national food security. The initiative aims to entice soybean farmers back to soybean cultivation, having previously shifted to maize. The adoption of GM soybeans could elevate yields from 1.6 to 2 metric tons per ha to an impressive 3.5 to 4 metric tons. Consequently, as farmers increasingly adopt seed technologies and companies innovate with genetically modified varieties, the seed market in Indonesia is poised for growth during the forecast period.
Rising Import of Vegetables Driving the Market
The domestic demand for vegetables in Indonesia is outpacing the supply, leading to increased imports from countries like China, India, Thailand, and New Zealand, accounting for 74.1%, 5.9%, 3.2%, and 3.1%, respectively, in 2023. Fresh vegetable imports from these countries are majorly utilized in horticulture satiation in the country as the locally grown varieties lack quality compared to the international competitors. Expanding this consumption further paves the way for seed breeders to capture the untapped seed market.
The Indonesian government has aimed to shorten the distribution channels by allowing farmers to sell their products directly in the markets, thereby enhancing the local production of quality vegetables. Furthermore, the demand for horticulture products from middle-income families is rising, challenging the inconsistent domestic supply and poor management facilities in horticulture production. According to ITC Trademap, the import volume of vegetables in Indonesia increased from USD 977,240 thousand in 2021 to USD 1,013,897 thousand in 2023.
