Indonesia is prioritizing downstream processing of key commodities to strengthen its economy, increase energy independence, and ensure food security, according to Minister of Agriculture Andi Amran Sulaiman.
Downstream Processing as Economic Driver
Speaking in Jakarta on Saturday, Sulaiman emphasized the need to shift away from exporting raw materials and instead focus on expanding domestic downstream industries to capture greater added value. He specifically highlighted coconut, crude palm oil (CPO), and gambier as crucial commodities for this strategy.
Indonesia is the world’s leading coconut producer, but a significant portion of its output is exported unprocessed. The minister noted that processing coconuts into products like virgin coconut oil, coconut milk, and coconut water could increase their value “tens to hundreds of times.”
Similarly, Indonesia supplies approximately 80 percent of global gambier demand, but primarily exports it in a semi-processed state. Sulaiman stated that further processing would allow Indonesia to benefit from a larger share of the value chain. He also pointed to palm oil, where Indonesia controls over 60 percent of global CPO production, with potential for transformation into higher-value goods such as margarine and cosmetics.
Impact on Economy and Food Security
Downstream processing, according to Sulaiman, will not only bolster the national economy but also improve the welfare of farmers, create employment opportunities, and enhance Indonesia’s position in the global economy. He acknowledged potential resistance from those opposed to reducing imports and increasing self-reliance in food and energy.
The government remains committed to advancing downstreaming, food self-sufficiency, and energy independence, aligning with directives from President Prabowo Subianto.
Indonesia has already seen positive results, with rice imports reduced by as much as 7 million tons – a reduction equivalent to approximately Rp100 trillion. This decrease contributed to a drop in global rice prices from US$660 per ton to US$340 per ton, representing a 44 percent decrease.
Indonesia’s achievements in the food sector have garnered international recognition, including food security awards from the Food and Agriculture Organization (FAO) in both 2024 and 2025. Countries including Japan, Canada, Chile, and Belarus have expressed interest in Indonesia’s food system and have visited to study it.
Sulaiman stressed the critical importance of food security, warning that a food crisis could lead to political instability and social conflict, making it a top national priority.
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