Indonesia: Dairy and Products Annual

Indonesia's dairy sector continued its recovery in 2025, with fresh milk production increasing 15.2 percent to 739,801 MT and forecast to increase to 775,000 MT in 2026. Dairy consumption grew 4.6 percent in 2025 but is projected to slow to 1.3 percent in 2026 amid inflationary pressures and rupiah depreciation, before recovering to 3.1 percent in 2027. Indonesia remains heavily dependent on imported dairy ingredients, particularly skimmed milk powder (SMP), whey, whole milk powder (WMP), and fat-filled milk, to support domestic processing and food manufacturing. Total dairy imports are forecast to rise 19 percent in 2026 to approximately 780,000 MT. Anticipation of price increases and currency depreciation in 2027 has prompted the dairy processors to build inventories that will increase imports volume to 20 percent compared with 2025 but projected to decline 26 percent in 2027 as processors draw down accumulated inventories.