In Indonesia, the modernization of food retailing has not been fully integrated
with global food trade. In a very large country like Indonesia, the
heavy reliance on domestic sources may be explained in part by the presence
of domestic capital resources that can invest in food manufacturing and
distribution. Rather than importing goods, it may be most cost-effective to
produce them in-country, where large labor supplies and a huge local market
both exist. Food imports continue to face slow, uncertain, and costly hurdles
at the border. Indonesia’s National Single Window for imports may offer
the promise of faster, more transparent trade in the future but has not yet
streamlined importing. Resistance from traditional retailers, middlemen, and
small-scale producers to large-scale, modern retailing and its drive to cut
supply chain costs may have slowed the growth of modern retailing, which
is a major driver of food imports. Expansion of the modern food retail sector
and diminished border barriers may contribute to greater integration with
global markets in the future and to increased agricultural imports, if current
constraints are eased.