Russia is considering exporting wheat to Indonesia in an effort to boost its own agricultural industry and help the Indonesian government meet its pledge to reduce rice consumption.
“The government of Indonesia is trying to reduce the dependence on rice consumption,” Russian Ambassador to Indonesia Alexander Ivanov said of the food commodity that Indonesia imports. “Wheat, as one of the substitutes for rice, is very important.”
Ivanov said that Russian companies were keen to add the country to the list Indonesia imports wheat from, which includes Turkey, Sri Lanka and Australia.
One company trying to win business in Indonesia is Altai Meals, from Russia’s Altain region, Ivanov said.
“It is not a secret that some wheat exported by Turkey to Indonesia actually has a Russian origin, so it would be cheaper for Indonesian importers to purchase it directly from Russia,” the diplomat said.
Ivanov said that Russia does not have a free trade agreement with Indonesia.
The Russian government is monitoring the creation of bilateral and multilateral free trade zones in the Asia-Pacific region.
“Until recently Russia was not a member of the World Trade Organization, but this year Russia became a full member, which gives us the ability to study bilateral or multilateral free-trade agreements,” the ambassador said. “This is a near-future goal.”
The Indonesian government recently launched a one-day no-rice program to encourage people to consider alternatives to rice, amid concerns about food security in the nation.
The program is controversial because rice has been a staple food for many years.
The announcement of potential imports of wheat comes at a time when Russia is seeking to strengthen it economic relationship with Indonesia.
On the sidelines of the Asia-Pacific Economic Cooperation summit in Russia earlier this month, Russian companies UC Rusal, the world’s biggest aluminium producer, and Norilsk Nickel, a global mining and metallurgical company, gave plans to President Susilo Bambang Yudhoyono on building smelters in Indonesia.
Industry Minister M.S. Hidayat said last week that Rusal had conducted surveys in Indonesia and is considering investment $1.5 billion in a new aluminium smelter next year.
The minister added that Norilsk, one of the largest miners in Russia, aims to build smelters for nickel and copper.
Coordinating Minister for Economic Affairs Hatta Rajasa said Russian investors had cumulatively recently pledged to invest more than $5 billion in Indonesia.
In August, Ivanov said that among the top investment plans are a $2.5 billion railway project in Central Kalimantan and the smelters.
Russia’s attempt to sell domestically-produced Sukhoi aircraft to Indonesian airlines recently faltered when a test flight crashed near Bogor, killing everyone on board.