24 February 2023 - Technical Assistance I

Despite the high demand for Indonesian chilli in the global market, local farmers and producers still struggle to send chilli products overseas. Indonesian chilli is not yet visible on the radar of hot spices enthusiasts and is still overshadowed by products from Thailand, Vietnam, China, and India.

The opportunities and standards requirements in Chilli export were discussed during the SME Sensitisation Webinar: What Does It Take to Export Red Chilli Products, on 23 February 2022. The webinar, organised by the Ministry of National Development Planning Agency (Bappenas) in collaboration with ARISE+ Indonesia, was part of support to the Major Project for Integrated MSME Development designed and coordinated by Bappenas and jointly implemented with the Ministry of Cooperative and MSME, and other relevant ministries.

The webinar brought together the chilli producer cooperative from Batu Bara District in North Sumatra, local government, SMEs, domestic buyers, foreign importers, ministries, academicians, and Indonesian trade attachés in Europe to discuss the requirements of the standards for chilli export, especially to the European Union.

The Director of MSME and Cooperative Development, Bappenas, Ahmad Dading Gunadi, said that the discussion aimed to strengthen the chilli supply chain, especially in Batu Bara District, one of the biggest chilli producers in Indonesia, to be able to meet the market demand, both domestic and international. According to Dading, the Ministry of MSME and Cooperative, through the Major Project programme, will support the chilli cooperative in Batu Bara Regency in building a processing unit for chilli.

"We hope this meeting can facilitate business matching for red chilli producers with their off-takers," Dading said.

The Team Leader of ARISE+ Indonesia Technical Assistance I, Marc Kwai Pun, extended his hope that ARISE+ Indonesia's support to Bappenas in strengthening the chilli supply chain will contribute to sustainable economic growth and the welfare of communities. Kwai Pun also appreciated the excellent cooperation and contribution of the stakeholders.

Alicia M Martino, the owner of Sendok Garpu, an Indonesian restaurant and grocery in Brisbane, Australia, said finding chilli products from Indonesia in Australia was impossible. "It is sad because our motto is authentic Indonesian food," Alicia said.

Alicia had to use chilli products from Thailand and Vietnam, which are available on the Australian market. She would use a lot of red chillies, especially to cook her signature beef rendang, up to 100 kg per week for each outlet. She also used chilli to prepare all kinds of sambal, one of the favourites in her restaurant. Sambal —an Indonesian word for hot sauce— is an integral part of the cuisine in the archipelago. Wherever you travel within Nusantara, every city has their own signature sambal. It is only natural that the Indonesian diaspora would cure their homesickness by eating sambal from Asian groceries, such as the one operated by Alicia.

Besides the Indonesian diaspora, chilli is also highly demanded by the broader, more diverse market. Gareth Logsdon, the purchasing manager of The Chilli Doctor in the UK, said that red chilli and its gourmet products have their own fans in Europe, making it a lucrative business. However, his company has not yet imported Indonesian chilli because only a few Indonesian producers have obtained Global Food Safety Initiative certification.

"The biggest challenge to export to Europe is the regulations for pesticides, heavy metals, mycotoxins, et cetera. Whilst the UK is leaving the EU, we're still following the same rules for food safety," Logsdon said.

Sabbat Jannes, Trade Attache of the Indonesian Embassy in the Netherlands, said that his office had been tirelessly trying to meet the EU requirements to help Indonesian producers send their chilli to Europe. The key points, he said, are food safety, certification, and continuity.

"Many importers complained that Indonesian products only have a brief shelf life, in addition to the lengthy shipping and expensive logistics cost," Sabbat said.

According to the founder of Berkah Abadi Jaya Cooperative, Ahmad Fauzi, Batu Bara District produces up to 16,000 tons of red chilli per year, making it very potential to supply the international market, especially with only 30 minutes distance from the Kuala Tanjung Port, which is located across Port Klang in Malaysia.

Unfortunately, during the harvesting season, there are many wasted chillies due to oversupply, which leads to a price drop. The Cooperative has collaborated with several universities to improve the supply chain management by processing the chilli using ozone technology, which prolongs fresh produce life to two months, and processing the chilli into paste, powder, or dried form.

"Thank you for the valuable insights shared on this webinar. The discussion has been instrumental in helping us understand the market opportunities and standard quality requirements for exporting chilli to Europe and other countries. We will use this information to improve our products. We look forward to further support and continued collaboration, especially in fulfilling standards and certification," Fauzi said.

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