Unmanufactured tobacco and refuse market in Indonesia

Earlier Report Observations

The market for unmanufactured tobacco in Indonesia expanded significantly in 2019, reaching 347.5 thousand tons, largely because the government refrained from raising cigarette prices during the presidential election year, supporting consumption. This growth was followed by a gradual contraction from 2020 to 2022, when the market shrank to 321.7 thousand tons, driven by repeated excise hikes on cigarettes—23% in 2020, 12.5% in 2021, and 12% in 2022—which made legal cigarettes more expensive and reduced demand for raw tobacco.

The market rebounded sharply in 2023, climbing to 387.9 thousand tons, as domestic production increased and exports fell. During this period, the rise in excise rates also fueled a shift toward illicit cigarettes, which accounted for 28% of consumption by 2021, and authorities responded with stronger enforcement, seizing 41% more illegal cigarettes in 2022. Meanwhile, the government introduced a 57% excise on e‑cigarettes in 2018, and the growing popularity of smoke‑free products like heated tobacco (HTP) began to reshape the industry, with four multinational firms dominating that segment.

In later years, Indonesia’s reliance on unmanufactured tobacco imports remained high despite being the world’s fourth‑largest producer, and inter‑ministerial coordination on tobacco regulation stayed weak. The country has not signed the WHO Framework Convention on Tobacco Control, and the industry has started to adopt sustainability initiatives in economic, social, health, and environmental spheres, while claims about reduced‑risk tobacco products lack solid evidence.

Production unmanufactured tobacco and refuse in Indonesia

In kind, 2018-2021, K t

From 2018 to 2021, Indonesia held the fourth position globally in the production of unmanufactured tobacco and refuse.

Top producers of unmanufactured tobacco and refuse, 2018-2021

World map of production of unmanufactured tobacco and refuse, 2018-2021

Indonesia's production of unmanufactured tobacco and refuse declined for the second year in a row. In 2021, the country produced 245.3 K t, marking a 6.0% decrease from 2020. Over the 2018-2021 period, production grew by 25.5%, with a compound annual growth rate of 7.9%. The highest production volume was recorded in 2019 at 269.8 K t, which also saw the largest annual increase of 38.0%.

Annual dynamics of production in Indonesia in kind, 2018-2021, K t

In value, 2018-2021, M $ US

The value of unmanufactured tobacco and refuse production in Indonesia rose for the third consecutive year. In 2021, output was valued at 1 910 M $ US, reflecting a 16.3% increase compared to the previous year. Between 2018 and 2021, production value surged by 86.5%, translating to an annualized growth rate of 23.1%.

Annual dynamics of production in Indonesia in value, 2018-2021, M $ US

Exports unmanufactured tobacco and refuse from Indonesia

Exports in kind, K t

Indonesia's exports of unmanufactured tobacco and refuse fell for the second year in a row. In 2021, exports totaled 27.4 K t, down 12.0% from the previous year. Over the 2018-2021 period, exports decreased by 15.1%, with a compound annual decline of 5.3%. The peak export volume was in 2019 at 33.3 K t, which also experienced the largest annual increase of 3.1%.

Annual dynamics of product's exports from Indonesia in kind, 2018-2021, K t

An analysis of exports in kind from 2018 to 2021 reveals a wide distribution across numerous markets. The Dominican Republic (20.9% of exports in kind), Singapore (14.3%), and the United States (13.9%) together accounted for 49.1% of total flows, while the remaining 50.9% went to other partners, indicating a highly diversified export structure.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Indonesia in kind, 2018-2021

Exports in value, M $ US

In 2021, Indonesia's exports of unmanufactured tobacco and refuse in value terms reached 213.4 M $ US, up 8.9% from the previous year. Over the 2018-2021 period, export value increased by 26.2%, with a compound annual growth rate of 8.1%. The largest decline occurred in 2020 at 3.0%, while the largest increase was in 2019 at 19.5%.

Annual dynamics of product's exports from Indonesia in value, 2018-2021, M $ US

From 2018 to 2021, Belgium (17.9% of exports in value terms), Singapore (15.2%), and Germany (13.2%) were among the top buyers of unmanufactured tobacco and refuse from Indonesia. However, even combined, they represented only 46.2% of total export value, highlighting a broadly diversified partner base.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Indonesia in value, 2018-2021

Imports unmanufactured tobacco and refuse to Indonesia

Imports in kind, K t

Following a two-year decline, Indonesia's imports of unmanufactured tobacco and refuse in kind increased. In 2021, imports amounted to 116.9 K t, showing a modest rise of 6.0% year-over-year. Between 2018 and 2021, imports decreased by 3.7%, equating to an annualized decline of 1.2%. The lowest import volume was in 2020 at 110.3 K t, with the largest drop occurring in 2019 at 8.6%.

Annual dynamics of product's imports to Indonesia in kind, 2018-2021, K t

From 2018 to 2021, China (38.7% of imports in kind), Brazil (18.0%), and Zimbabwe (8.9%) remained the primary suppliers of unmanufactured tobacco and refuse to Indonesia, collectively accounting for 65.7% of total imports in kind.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Indonesia in kind, 2018-2021

Imports in value, M $ US

After a two-year decrease, foreign supplies of unmanufactured tobacco and refuse to Indonesia in value terms increased. In 2021, imports were valued at 550.4 M $ US, up 6.6% year-over-year. Over the 2018-2021 period, import value fell by 15.7%, with a compound annual decline of 5.5%. The lowest value was recorded in 2020 at 550.4 M $ US, and the largest decline was in 2019 at 16.6%.

Annual dynamics of product's imports to Indonesia in value, 2018-2021, M $ US

In the 2018-2021 period, China (29.8% of imports in value terms), Brazil (20.5%), and the United States (8.6%) were the main sources in the geographical breakdown of imports in value terms for unmanufactured tobacco and refuse to Indonesia, together making up 58.9% of total flows.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Indonesia in value, 2018-2021