PALMOILMAGAZINE, BONTANG — Indonesia’s fertilizer industry marked a major milestone after officially launching urea fertilizer exports to Australia under a cooperation scheme projected to reach nearly IDR 7 trillion in value. At the same time, the government has also succeeded in lowering subsidized fertilizer prices by 20% while increasing fertilizer allocation for domestic farmers.
Minister of Agriculture Andi Amran Sulaiman announced the development during the inaugural export release ceremony for urea fertilizer produced by PT Pupuk Indonesia (Persero) through PT Pupuk Kalimantan Timur at Bontang Port, East Kalimantan, on Wednesday (14/5/2026).
The shipment marked a new phase of fertilizer sector cooperation between Indonesia and Australia through a government-to-government (G2G) partnership.
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Amran explained that the first export shipment consisted of 47,250 tons of urea fertilizer valued at around IDR 600 billion. The export forms part of an initial commitment of 250,000 tons, with plans to increase shipments to 500,000 tons, bringing the total cooperation value to approximately IDR 7 trillion.
“We plan to export 250,000 tons to Australia initially, and later increase it to 500,000 tons,” Amran said, as quoted by Palmoilmagazine.com from the Agriculture Ministry’s official statement on Friday (15/5).
At the same event, Amran highlighted significant progress in Indonesia’s domestic fertilizer sector under policies introduced by President Prabowo Subianto. According to him, subsidized fertilizer prices have been reduced by 20% without increasing the state budget burden, while the government has also expanded subsidized fertilizer allocation by 700,000 tons to improve farmers’ access.
“While global geopolitical tensions continue to rise, Indonesia has managed to reduce fertilizer prices by 20% and increase fertilizer volumes for farmers,” he said.
Amran added that the achievement demonstrates the growing competitiveness of Indonesia’s fertilizer industry and opens opportunities for new export markets.
He revealed that several countries have already expressed interest in importing Indonesian fertilizer products. India, he said, has directly requested 500,000 tons of urea fertilizer, while other countries including the Philippines, Brazil, and Bangladesh have also shown interest.
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Meanwhile, Australia’s Deputy Ambassador to Indonesia, Gita Kamath, praised the strengthening cooperation between the two countries.
“On behalf of the Australian Government, I would like to express our sincere appreciation to Minister Amran. Australia highly values its relationship with Indonesia, and this cooperation reflects the strong partnership between our countries,” she said.
Kamath noted that the collaboration would also support food security in both nations. Indonesian fertilizer exports, she explained, will help Australian farmers increase production of commodities such as wheat, which are widely used in Indonesian food industries.
Amran further stated that the achievements were closely linked to strategic reforms introduced by President Prabowo to improve fertilizer governance from upstream to downstream sectors.
At the beginning of the administration, the government increased subsidized fertilizer allocation from around 4.55 million tons to 9.55 million tons to accelerate national food self-sufficiency efforts.
The government also simplified fertilizer distribution by deregulating 145 cross-ministerial regulations and streamlining the supply chain through a direct distribution model connecting the Agriculture Ministry, PIHC, farmer groups, cooperatives, and farmers.
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In addition, the government reformed the fertilizer subsidy mechanism by eliminating several inefficiency components, including raw material profit margins, bank interest burdens, and multiple VAT charges. The reforms are projected to save up to IDR 14 trillion while lowering domestic fertilizer production costs.
Alongside governance reforms, the government has accelerated revitalization of the national fertilizer industry through seven strategic projects worth IDR 72.84 trillion involving PT Pupuk Indonesia (Persero), PT Pupuk Sriwidjaja Palembang, PT Pupuk Kalimantan Timur, PT Petrokimia Gresik, and PT Pupuk Kujang.
The modernization program includes replacing aging, energy-intensive factories with more efficient production facilities. New fertilizer plants are estimated to reduce production costs by more than 26% compared to older facilities.
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Through subsidy reforms and industrial revitalization, the government projects fertilizer subsidy savings could reach IDR 112 trillion by 2035 while cutting potential annual inefficiencies of IDR 14.4 trillion.
Amran emphasized that all reforms in the fertilizer sector are aimed at strengthening national food security, improving farmer welfare, reducing imports, and building a more independent fertilizer industry.
“Fertilizer is not merely about production and distribution. It is a strategic instrument for achieving national food sovereignty,” Amran stated. (P3)
