Seaweed trade: Unleashing Australia-Indonesia seaweed industry’s trade potential

This report outlines growth and partnership opportunities for the seaweed industry between Australia and Indonesia. At the moment there is minimal commerce between the two neighbouring countries despite Indonesia being a major seaweed producer and Australia being a major importer.

The research has uncovered key factors that can show where a closer partnership can be facilitated or curtailed. These include consumer demand, industrial capability, trading channels and the role of Australian and Indonesian government policies in supporting bilateral trade and broader commercial collaboration.

From the study area of a regency in South Sulawesi the report finds that most of the seaweed is exported in dried form to China where it is then processed for market consumption. Its sale as an export commodity mostly in raw form shows the lack of value-adding capacity at the source of where it is initially grown, harvested and dried.

Indonesia holds considerable potential to reinforce its position as a primary supplier in the international market given how much it already exports. This report addresses the opportunity by analysing Indonesia’s production capabilities and the potential markets in Australia.

What is clear is that the Indonesian seaweed industry can’t grow without investment and technical collaboration which would help it develop to the standards required by a country like Australia. Australia imports a lot of seaweed but only a fraction is sourced from Indonesia.

The Australian seaweed import trade is worth more than AU$40 million and the industry has ambitious plans to create a AU$1.5 billion dollar industry by 2040. Meanwhile in 2022 the province of South Sulawesi exported just AU$1.8 million worth of seaweed to Australia. There is some processing of seaweed to create carrageenan however exports of this ingredient from Indonesia to Australia are also very low.

Read full report about unleasing Australia-Indonesia seaweed industry potential here

There is also little to no understanding of Indonesia’s seaweed production by the Australian industry nor an understanding in Indonesia of how to leverage into other more mature markets. This report outlines the seaweed production landscape in South Sulawesi to create a clear picture of current process and potential. It examines the Australian market situation and product requirements and from this information presents recommendations on how the two nations can work together.

We see opportunities across various sectors such as animal feed, cosmetics and the food and nutrition industries. The obstacles to collaboration include mismatched market demands, lack of product value addition and limited market and product understanding. A clear mutual interest exists for future business collaboration in the seaweed sector which allows for both countries to enhance their own industries and unleash the full economic, environmental and social benefits.

Based on our findings, we propose the following recommendations which form a multi-strand approach to encourage bilateral benefits:

For enhancing industry practices:
• Increase the volume and efficiency of seaweed seed production and distribution.
• Secure support from governmental bodies to offer farmers affordable and timely access to high-quality seaweed seeds.
• Prioritise eco-friendly farming practices and provide necessary training and equipment to farmers.
• Promote the use of durable and environmentally-friendly materials, such as HDPE buoys, in farming.
• Adhere to standard operating procedures to prevent premature harvesting and ensure high-quality seaweed production.
• Improve post-harvest procedures, incorporating the use of drying racks and greenhouses, to boost product quality.

For aligning products with market needs:
• Carry out comprehensive market research to close the gap between product specifications and market demands.
• Control supply effectively to balance the seaweed materials designated for export and domestic processing.
• Move research outputs to commercialisation and industrialisation stages.

For expanding the market in Australia:
• Enhance the information flow and visibility of Indonesian seaweed products in the Australian market.
• Tailor existing products grown and processed in Indonesia to cater to the Australian market’s needs.
• Set up communication channels and networks between business organisations in both countries.
• Utilise the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) to facilitate market expansion.

For aligning products with market needs:
• Carry out comprehensive market research to close the gap between product specifications and market demands.
• Control supply effectively to balance the seaweed materials designated for export and domestic processing.
• Move research outputs to commercialisation and industrialisation stages.

For encouraging potential collaborations:
• Advocate for collaboration and investment between Indonesian and Australian firms.
• Leverage Australia’s advanced technology and know-how to enhance product value.
• Foster business relationships through seaweed associations or direct B2B communication.

For attracting investment opportunities in Indonesia:
• Engage Australian investors to gain significant benefits, especially in technological advancements and systematic improvements.
• Learn from experience investing and operating in Indonesia, taking advantage of developmental initiatives and programs.
• Encourage further investment into the seaweed industry, leveraging the existing presence of Australian companies in Indonesia.

Feature image by PAIR