Indonesia Cassava Market - Trend Analysis & Forecast to 2030

Indonesia cassava production reached 17.99 million tonnes in 2022 and is projected to grow at a CAGR of **% from 2020 to 2030. Indonesia is a key player in the global cassava market, contributing significantly to both production and export. With rising demand for cassava in various industries, the market is expected to witness robust growth by 2030. Factors such as increasing domestic consumption and global demand for cassava products like starch, ethanol, and food items are driving this trend.

Market/ Product Overview

Cassava, also known as manioc, is a vital crop in Indonesia, cultivated primarily by smallholder farmers. The country ranks among the top cassava producers globally, thanks to its favorable climatic conditions and large agricultural workforce. Cassava's importance extends beyond food security, as it is a raw material for several industries including food processing, biofuel production, and animal feed. As demand for cassava-based products continues to rise both locally and internationally, the Indonesian cassava market is forecasted to grow steadily until 2030. Key trends include expansion in the processed cassava segment, driven by industrial and consumer demand for cassava starch and derivatives, and growing export opportunities within ASEAN markets and beyond.

Indonesia’s Significance in the Global Cassava Supply

Indonesia plays a crucial role in the global cassava supply chain, being a major producer and exporter of cassava and its derivatives like tapioca starch. The country is a key supplier to regional markets in Southeast Asia and beyond. It provides critical raw materials for industries such as food processing and biofuel, positioning it as a competitive player in the global market.

Indonesia Cassava Supply & Demand Trend

Indonesia’s cassava production remains robust, driven by both domestic consumption and export opportunities. Indonesia's Lampung province is a key contributor to the country's cassava production, accounting for approximately 34% of the national total annually. Local demand for cassava in food products, animal feed, and industrial uses like ethanol is on the rise. With improved farming practices and government support, production is expected to increase. Cassava consumption is set to grow, particularly in processed forms like tapioca starch, meeting the needs of food manufacturers and export markets.

Indonesia Cassava Market Growth Factors

The growth of Indonesia’s cassava market is attributed to several key factors. First, the rising global demand for gluten-free and plant-based products has boosted cassava's popularity in the food industry. Cassava’s versatile nature allows it to be used in diverse applications such as tapioca starch, biofuel, and sweeteners. Government support in the form of subsidies, agricultural reforms, and incentives for cassava farmers has further propelled production. Additionally, the growing demand for bioethanol in the renewable energy sector has increased cassava's importance as a feedstock for biofuel production. Furthermore, expanding export markets in Asia and Europe are fueling demand for high-quality cassava derivatives, providing lucrative growth prospects.

Indonesia Cassava Market Restraints & Challenges

Despite the market’s growth potential, several challenges persist. One major challenge is the dependence on smallholder farmers, who often lack access to modern farming techniques and technologies, limiting productivity. Climate change and unpredictable weather patterns also pose risks to cassava cultivation, affecting yields. Furthermore, poor infrastructure in some rural areas hampers the efficient transport of cassava from farms to processing facilities and export terminals. Fluctuations in global prices and competition from other cassava-producing countries like Thailand and Vietnam also challenge Indonesia's market share.

Indonesia Cassava Supply/ Value Chain Bottlenecks/ Challenges

The cassava supply chain in Indonesia faces several bottlenecks that hinder efficiency. Inconsistent production quality due to outdated farming practices remains a critical issue. Many smallholder farmers lack access to improved planting materials and fertilizers, which affects yields and quality. Additionally, post-harvest losses are significant due to inadequate storage facilities and transportation infrastructure, particularly in remote regions. The fragmented nature of the supply chain also leads to inefficiencies, with multiple intermediaries driving up costs and reducing farmer profits. Furthermore, there is a need for better integration between cassava producers and processing industries to streamline the value chain and boost competitiveness.

Price Setting Power of Indonesia in Global Cassava Value Chain

Indonesia’s cassava price-setting power is influenced by domestic supply levels, regional competition, and global market trends. While Indonesia is a significant producer, its pricing power is often constrained by competition from other large cassava-exporting countries like Thailand and Vietnam. However, the country does have some influence in regional pricing within Southeast Asia, particularly for processed cassava products like tapioca starch.

Indonesia End-use Industries

Cassava is widely used across several industries in Indonesia. It serves as a staple food in various processed forms, and its starch is an essential ingredient in food processing. Chips are the high profit margin products derived from the cassava processing. The biofuel industry also consumes large quantities of cassava for ethanol production. In addition, cassava is used in the animal feed industry and for manufacturing paper, textiles, and adhesives, showcasing its broad industrial applications.

Indonesia Cassava Trade (Export & Import) Trend

Indonesia’s cassava export trends show strong growth, driven by increasing demand for cassava starch, especially from China and other Asian markets. Export volumes of tapioca starch and other derivatives have steadily risen, supported by competitive pricing and improvements in quality standards. In 2023, Indonesia exported cassava starch valued at USD 84.57 million, with China accounting for USD 53.70 million of these imports.

The country imports relatively low volumes of cassava, focusing more on the export of processed products. However, challenges such as fluctuating global prices, logistics inefficiencies, and competition from neighboring countries impact the trade dynamics. With government initiatives to enhance cassava exports, Indonesia is expected to strengthen its position as a leading cassava supplier by 2030.

Indonesia Cassava Market Competitive Analysis

Indonesia's cassava market features a mix of smallholder farmers and larger agribusinesses. Major players are involved in cassava processing and export, with several companies specializing in tapioca starch production. Local companies compete with regional firms, especially from Thailand and Vietnam. Government initiatives aimed at improving cassava farming and processing capabilities have enhanced market competitiveness. However, the market remains fragmented, with opportunities for consolidation and vertical integration.

■ PT Budi Starch & Sweetener Tbk
■ PT Tunas Sawaerma
■ PT Budi Acid Jaya Tbk
■ PT Sukses Mandiri Utama
■ PT Permata Dunia Sukses Utama
■ PT Keong Nusantara Abadi
■ PT Sari Bumi Agung
■ PT Starch Industrial Nusantara
■ PT Royal Tapioca Indonesia
■ PT Harapan Baru Sejahtera
■ PT Papuana Mandiri
■ PT Fajar Starch
■ PT Sumber Kasih Food Industry
■ PT Jaya Perkasa Nusantara
■ PT Berkat Cassava Jaya

Future Outlook

The future outlook for Indonesia’s cassava market is positive, with anticipated growth driven by rising demand for cassava-based products in both domestic and international markets. The government’s focus on improving agricultural productivity and cassava value chains will enhance production efficiency. Technological advancements in farming practices and post-harvest processing are expected to boost cassava yields and product quality. Additionally, as global demand for biofuels and gluten-free products grows, cassava is poised to play an increasingly important role, solidifying Indonesia’s position as a major supplier in the global market by 2030.