Kadin Warns of Negative Effects of New Import Regulations: Inflation and Market Disruption
The government has affirmed its policy on regulating the flow of food imports by issuing Minister of Trade Regulation (Permendag) No. 11 of 2026, the Second Amendment to Minister of Trade Regulation No. 18 of 2025 on Policies and Regulations for Importing Agricultural and Livestock Products.
This regulation is the second amendment to Permendag No. 18 of 2025 and was promulgated on 24 April 2026. The regulation will take effect 14 days after promulgation, meaning on 8 May 2026. This regulation is part of the government’s efforts to strengthen food security while curbing import dependency.
In response to the issuance of Permendag No. 11/2026, Saleh Husin, Deputy General Chairman for Industry of the Indonesian Chamber of Commerce and Industry (Kadin), stated that the policy of centralising feed wheat imports through state-owned enterprises (BUMNs) such as PT Berdikari can be understood as the government’s effort to strengthen control over the supply and prices of strategic commodities.
“This approach enables more coordinated import management, reducing global supply volatility. It also positions BUMNs as stabilisation instruments (buffers) within the framework of food security and industrial policy,” Saleh Husin said in his statement on Tuesday (5/5/2026).
Beware of Price Surges at the Consumer Level
However, he added, the potential for price differences is an issue that must be highlighted.
Saleh Husin said that if there are significant price differences, around US$100/ton, it indicates potential inefficiencies.
“This scheme risks creating market distortions due to the loss of competitive mechanisms and increasing input costs for the livestock industry,” he emphasised.
The impact, according to Saleh Husin, not only squeezes business margins.
“But it also has the potential to be passed on to consumers in the form of price increases for food products such as chicken, eggs, and meat, thereby amplifying inflationary pressures,” he stated.
Therefore, he added, although this policy has justification at the macro level, an implementation that is too closed and inefficient could be counterproductive.
“A more balanced approach, for example by opening limited direct import options while still maintaining the role of BUMNs as stabilisers, would be more effective in maintaining a balance between market stability and industrial efficiency,” Saleh Husin said.
Permendag No. 11/2026
Looking at the Considering section (a) of Permendag No. 11/2026, the government’s reason for establishing these new import rules is to support the food self-sufficiency programme and import substitution for agricultural products.
The first amendment occurs in paragraph (1) of Article 2, so the agricultural and livestock products regulated for import are:
animals and animal products
rice
sugar
corn
garlic
horticultural products
cassava and its derivatives
feed wheat
soybean meal
mung beans
peanuts.
In paragraph (2), it is explained that the rice referred to is:
rice for general needs of BUMNs holding API-U
rice for other needs of API-P
rice for other needs of BUMNs holding API-U.
However, this regulation does not apply to the Entry of Agricultural and Livestock Products in the form of animals and animal products, rice for other needs of API-P, corn, cassava and its derivatives, feed wheat, soybean meal, mung beans, peanuts into Bonded Storage Facilities (TPB). But it will apply if those goods are sent to other places in the destination customs area for import and use.
Likewise, in paragraph (1) of Article 11, it is stipulated that this import regulation policy does not apply to imports under export destination import facilitation exemptions, except for sugar.
Director of Imports at the Ministry of Trade, Andri Gilang Nugraha, explained that this regulation aims to maintain price stability and encourage domestic production.
“One of them is for mung bean and peanut commodities. The declining interest of farmers in cultivating these commodities is partly caused by the free entry of imported products without time or volume restrictions,” he said in his statement, quoted on Thursday (30/4/2026).
“Therefore, this regulation is intended to support national independence through food self-sufficiency as per the President’s Asta Cita,” Gilang stated.