Indonesia Sugar Market - Forecasts from 2024 to 2029

The Indonesian sugar market is expected to experience a CAGR of 5.26% throughout the forecast period, reaching a market size of US$10.208 billion by 2029. This represents a substantial increase from US$7.129 billion recorded in 2022.

Changes in local consumption patterns, governmental regulations, climatic circumstances, and global market dynamics, influence the Indonesian sugar market. There is a huge domestic demand for sugar due to the country's expanding population. Furthermore, sugarcane production and cultivation are influenced in Indonesia by local and global weather conditions fueling the sugar market in the nation. In addition to this, technological developments, foreign exchange rates, and pricing differences all influence the market's complexity. Concerns about sustainability, customer preferences, and the effectiveness of logistics and infrastructure systems are also significant factors driving market growth. The pricing and supply of sugar are significantly influenced by trade agreements, subsidies, and import taxes, among other government policies. For instance, as per the Government of Indonesia, one million hectares of land in the province of Papua were given to the government to increase sugar production and attain national self-sufficiency. The government claimed that the site would be accessible to foreign and domestic companies that are eager to build a sugar industry in the nation. It further added that several investors had already begun sowing sugar cane seeds around the region.

The robust demand for sugar in the food and beverage sector drives the Indonesian sugar market. Sugar is a flexible component that is widely used in the creation of a wide range of food and drink items, which influences both domestic consumption patterns and market dynamics. According to the survey conducted by the National Library of Medicine, in Indonesia, instant coffee was the most often consumed sugar-sweetened beverage (SSB) (29.4%) among the 340,032 homes studied, whereas produced liquid milk was the least frequently preferred (5.7%). 25% of the families in this survey drank mineral water, the sole unsweetened beverage, and spent an average of IDR 44,129 (US$ 2.9) per home per month on it. Although produced milk was the least popular beverage, families spent the most money on it (IDR 84,285 or US$ 5.5 on average) per month. Households, on the other hand, spend the least on tea drinks and carbonated beverages (on average IDR 35,999 or US$ 2.4). Furthermore, market participants in the Indonesian sugar business employ various tactics such as product diversification, supply chain optimization, sustainability practices, and technology adoption to effectively traverse complicated market dynamics and maintain competitiveness in a constantly evolving sector.

Increasing production and consumption propels the Indonesian sugar market.

The Indonesian sugar market growth is significantly influenced by the country's domestic sugar consumption. The demand for sugar is strong due to the vast and expanding population, which has a direct impact on the level of production, import-export regulations, and general stability of the market.

According to OECD estimates, Indonesia's sugar consumption rose from 27.67 kg in 2022 to around 28.23 kg in 2023. Less social distancing and travel limitations are anticipated to decrease domestic sugar consumption as Indonesia extends its COVID-19 immunization program, which was introduced in January 2021. On the other hand, rising demand in the food and beverage sector is anticipated to raise refined sugar consumption. Furthermore, the production of sugar has a major effect on the pricing, supply, and market dynamics of sugar in Indonesia. Sufficient domestic production lessens the need for imports and promotes market stability by helping to fulfil the demand for sugar. For instance, the growth of private sugar mills results in higher production in 2022-2023. It is predicted that El Nino, which typically raises the amount of sugar in sugarcane and keeps private sugar mills' land expansion, would boost plantation white sugar output even more in 2023-2024, reaching 2.6 million metric tonnes (MMT). However, it is anticipated that imports of raw sugar will rise mostly as a result of increased refinery demand. The Government of Indonesia (GOI) has granted permission to import 991,000 tonnes of plantation white sugar in 2022-2023 to lower and stabilize retail prices.

As per the USDA report, the retail price of plantation white sugar has grown due to higher production costs and growing demand. A National Food Agency guideline on reference prices for buying and selling soybeans, shallots, chiles, beef, buffalo meat, and sugar was released by the GOI in December 2022 to control pricing. Plantation white sugar reference prices are established at Rp. 11,500/kg ($768/MT) for producers and Rp. 13,500-Rp. 14,500/kg ($901-968/MT) for consumers. As of 2022, the new reference price at the consumer level is Rp. 13,500 per kg ($901/MT), an increase of 0 to 7.4%. The average retail price is Rp 14,400/kg ($961/MT), up 0.8 per cent from Rp 14,283/kg ($954/MT). In addition, shifting dietary trends, health concerns, and customer tastes all affect the sugar market, causing producers to modify their methods of production and have an effect on the food and beverage industry. To navigate the complexity of the market and guarantee a sustainable and responsive sugar sector, stakeholders have a thorough awareness of domestic consumption trends and production.

Segmentation:

By Form:

• Sugar Cubes
• Granulated Sugar
• Powdered Sugar
• Sugar Syrup

By Source:

• Cane Sugar
• Beet Sugar

By Use:

• Food and Beverage
• Pharmaceuticals

By Distribution Channel:

• Online
• Offline