By Prof. Michael Tanchum

Southeast Asia’s rising middle-income economies with their robust demographic growth profiles represent some of the most important market opportunities for global agribusiness over the next 20 years. Recovered from their post-COVID slump, the famed ‘tiger economies’ of Southeast Asia as a whole are projected [Ref. 1] to experience 4.75% economic growth in 2025. The economic growth in the upper middle income economies of the region – Indonesia, Thailand and Malaysia – is expected to remain strong, while the accelerating lower middle income economies of The Philippines, Vietnam and Cambodia are expected [Ref. 2] to post economic growth of 6% or higher. Beyond this, it is Southeast Asia’s higher fertility rates and lower median age that set the region apart from the demographic collapse occurring in China, Japan and South Korea, as well as the demographic demise of the nations of Europe. To ensure adequate and affordable food supplies to their growing populations, the major nations of Southeast Asia have initiated programs to achieve agri-food self-sufficiency, which will require fertilizers and other agribusiness solutions to increase yield and agricultural efficiency.

Southeast Asia’s boom and the drive for agri-food self-sufficiency

Southeast Asia already has a much larger and younger population than Europe. The current aggregate population of the Association of Southeast Asian Nations (ASEAN) is 677 million [Ref. 3], 1.5 times larger than the roughly 450 million in the European Union (EU). Fertility rates across the ASEAN nations have long been more robust than their EU counterparts. Most of the national fertility rates in Southeast Asia are at or above the replacement level of 2.1, with some projections suggesting a possible dip to only 1.9. While the median age across the European Union is 44.5 years, the median age across Southeast Asia is 30.5 years. In contrast to Europe, China, Japan and South Korea, Southeast Asia’s economic tigers are eyeing significant population increases during the next 20 years in addition to robust economic growth.

Indonesia’s population, the region’s largest with over 280 million citizens, is expected to grow by over 2 million people per year. Indonesia has been forecasted [Ref. 4] to reach 324 million by 2045, an additional 54 million people over the country’s 2020 population, generating a commensurate rise in the country’s food demand, particularly affecting staple crops. The Philippines, the region’s second largest population with about 114 million, is forecast [Ref. 5] to add 1.7 million people annually to its population. With similar growth trends projected for most of the region, Southeast Asia nations are staring at the daunting challenge of providing sufficient and affordable food to meet the soaring demand over the next 20 years. In the wake of the cascade of food supply chain shocks following the COVID-19 pandemic and the outbreak of Russia-Ukraine War, Southeast Asian nations are no longer satisfied to rely on international agri-food trade flows to feed their populations and ensure economic growth. The perceived vulnerability of relying on global agri-food flows has further been further heightened by China’s hording of staple food crops. To ensure their own food security, the major ASEAN economies have launched initiatives to reach agri-food self-sufficiency. In the interim, the ASEAN nations have placed a premium on intra-regional trade and agricultural cooperation among themselves to achieve security of supply. Both trends mean that Southeast Asia requires additional agri-tech solutions to increase yield and improve production efficiency.

Additionally, achieving food self-sufficiency also requires domestic agricultural production with the ASEAN nations to become more resilient in the face of extreme abiotic stress caused by the El Nino-Southern Oscillation weather pattern (ENSO), which is regularly generated in the Pacific Ocean. ENSO’s deleterious impact on agriculture is further exacerbated by climate change. When triggered, ENSO’s El Nino phase can cause extreme heat and drought across Southeast Asia while the La Nina phase can cause extreme wet weather and typhoons. In early September 2024, Typhoon Yagi ravaged several nations in Southeast Asia. The serious damage suffered by 26 provinces in northern Vietnam caused growth in the agricultural sector to slow down to 3.2% [Ref. 6], despite Vietnam’s overall economic growth rate of 6.8% in the same period. With climate change exacerbating extreme weather phenomena, Southeast Asia’s need to acquire agri-tech solutions to cope with abiotic stress has become even more urgent.

Securing Southeast Asia’s rice supply

The trend toward national and regional food self-sufficiency is first and foremost witnessed with Southeast Asia’s principal staple grain: rice. The world’s most popular grain after wheat, rice accounts for 20% of the world’s calorie supply and is the staple food for more than 900 million people [Ref. 7]. Thailand and Vietnam are the world’s second and third largest rice exporters [Ref. 8] respectively, with Cambodia being the 5th largest and Myanmar the 7th largest. Thailand, Vietnam, Myanmar, Cambodia and Laos devote more land to rice cultivation than any other crop. With repeated cycles of flooding and draining, rice cultivation is highly sensitive to abiotic stress that can alter the quantity of water and nighttime temperatures for optimal yield. Additionally, rice requires significant quantities of phosphate fertilizers. The push for agricultural self-sufficiency translates into new market opportunities for agribusiness technologies that can increase rice yields through improving water-use efficiency, nutrient uptake or coping with abiotic stress.

Indonesia’s rice demand is expected to soar to about 45 million tons [Ref. 9], one and half times the estimated 2024 yield [Ref. 10] of 30.34 million. Indonesia has set a target to become food self-sufficient by 2029, as President Prabowo Subianto declared [Ref. 11] in his October 2024 inaugural address: “We must aim for food self-sufficiency as soon as possible. We cannot rely on food sources from abroad.” Toward this end, Indonesia’s Coordinating Minister for Food Affairs has programmed the cultivation of 600,000 to 2 million hectares of land in the Papua region, with rice, as well as corn and sugarcane, as priority crops.

With similarly soaring demand for rice, The Philippines is facing an unsustainable rise in the cost of rice to consumers. Among the world’s largest rice importers, the Philippines declared [Ref. 12] a food security emergency in February 2025 to bring down the price of rice. In June 2023, the president set a national target of 97% percent self-sufficiency in rice, requiring a yield increase that would be equivalent to an additional 4 million tons of milled rice [Ref. 13]. In the short term, the Philippines has turned to Vietnam, a global rice producing powerhouse for which the Philippines has been the largest export market. The Philippines lowered its tariffs [Ref. 14] on rice from 35% to 15%, while Vietnam agreed [Ref. 15] to deepen its agricultural cooperation to boost Filipino production.

Self-sufficiency and the growing demand for animal feed and biofuels

Similar concerns for self-sufficiency are driving efforts to increase the yields of maize (corn), soybeans and sugarcane, as well as oil palms and coconuts – especially as the growing demand for these crops is rising with the increasing demand for animal feed and biofuels across Southeast Asia. In the Philippines, about 74% of domestically produced maize is used for animal feed, with almost all of the remainder used for processed products (such as corn starch, oil and syrup) or for food snacks. The country still faces approximately a 40% gap in self-sufficiency [Ref. 16] for maize used in animal feed production, which is covered by imports. To close that gap, the Filipino government promulgated “The Philippine Yellow Corn Industry Development Roadmap” [Ref. 17] as a blueprint for the development of the industry that has begun with a short-term implementation plan that has included the dedication of tens of thousands of additional hectares of land to maize cultivation. Maize is the primary feed ingredient for poultry in the Philippines, while soybean meal ratio [Ref. 18] in aquaculture feeds can reach as high 40% and pig feed 20%.

Reflecting the same regional trend, Thailand is facing soaring demand for animal feed grains with the increased production of its poultry and swine sectors. Thailand is eyeing a 2% increase in maize production [Ref. 19] due to the expansion of land under maize cultivation and improved yield. Full fat soybeans, as opposed to soybean meal, is used in Thai animal feed. Demand for feed is even higher in Vietnam, whose livestock and aquaculture sectors are experiencing robust growth with increased domestic demand fueled by Vietnam’s overall high rate of economic growth as well as high export demand. Vietnam’s pig and poultry populations increased by 2.5% and 2.2% respectively [Ref. 20] during the first 9 months of 2024, despite 156 outbreaks of African Swine Fever and one outbreak of Avian Influenza. Vietnam’s catfish exports were up 9% [Ref. 21] over the previous year, while the value of Vietnam’s shrimp exports increased 11% [Ref. 22].

Maize production is less commercially viable than other crops in Vietnam, but can be grown as a substitute rotational crop in rice fields. Argentina and Brazil are Vietnam’s two largest foreign maize suppliers. Vietnam’s third largest maize supplier India ceased its exports to Vietnam [Ref. 23] as New Delhi’s turn to corn-based ethanol production to meets its mandate for 20% ethanol blend in gasoline has turned India into a net maize importer [Ref. 24]. Aside from Ukraine, Vietnam has turned to the Southeast Asian nation of Myanmar to make up its maize shortfall. Myanmar is among the world’s top 15 maize exporters [Ref. 25], with export volumes typically exceeding Europe’s middle ranking maize exporters like Hungary and Bulgaria. Improving domestic maize production in Vietnam through agri-tech solutions as well as in Vietnam’s Southeast Asian neighbours is becoming an increasingly urgent need.

Southeast Asian biofuels: An additional driver of higher crop output

Southeast Asia’s push to develop biofuels as a green energy source puts further demand pressure on the region’s major crops, as first-generation biofuels from food crops are playing a prominent role in the transition. In December 2024, the Vietnamese government issued a directive [Ref. 26] to accelerate the promotion of biofuels, particularly the use of E-5 (5% ethanol blend in gasoline), which uses maize as its feedstock. Similarly, Indonesia has expanded the use of E-5 on the way to its target of achieving 20% ethanol blend. The expansion occurred in Java, the world’s most populous island. Produced in East Java, the fuel ethanol uses molasses as a feedstock. Supplying sufficient molasses feedstock has been challenged by the need to meet competing demand pressures [Ref. 27] for molasses from the nation’s food processing sector, which also requires molasses as a feedstock.

The Philippines has an even more aggressive program when it comes to bioethanol. Mandating E-10 (10% ethanol blend) in 2013, the Filipino government began allowing fuel retailers to sell E-20 blends in 2024. Since the 2013 E-10 mandate, ethanol production in The Philippines has jumped by almost 450% [Ref. 28], and currently consumes 80% of the country’s molasses supply [Ref. 29], creating even more competing demand pressures than in Indonesia. In the face of insufficient sugarcane production to be self-sufficient in molasses as a feedstock for fuel ethanol, the use of maize as a feedstock would impinge on The Philippines efforts to be self-sufficient in maize for food production, necessitating new areas of maize cultivation or improved yield in current corn production. In 2024, the Thai government extended subsidies [Ref. 30] on biofuels to boost the use of E-20 and E-85, causing Thailand to face similar demand pressure on sugarcane and molasses production.

Additionally, Southeast Asia has made significant strides in promoting the consumption of biodiesel as well biodiesel production, primarily from oil palms (The Philippines’ use of coco methyl ester derived from coconut oil as a feedstock is a notable exception). Palm oil is the largest feedstock for biodiesel production worldwide, accounting for 36% [Ref. 31] of the global resource basis, followed by soybean oil at 23%. Prior to Typhoon Yagi, Indonesia was the world’s third largest producer [Ref. 32] of biodiesel, using palm oil methyl ester as a feedstock. Biodiesel consumption in Indonesia has jumped 48% [Ref. 33] compared to pre-pandemic 2019 as a result of higher blending rates (up to 35% biodiesel) as well as increased diesel use. Thailand is also regional leader in the domestic use of biodiesel. The Thai government extended subsidies on B-10 and B-20, working to ensure that all domestically produced biodiesel is compliant with the Euro 5 standard. With restrictions on biodiesel imports to protect local oil palm growers, the number of hectares of matured oil palms in Thailand has grown significantly and is slated to reach 1.63 million hectares by 2037, with 14.4% [Ref. 34] of the fresh fruit bunches produced to be used in biodiesel production.

The need to increase oil palm yields in Thailand, Indonesia and elsewhere in Southeast Asia for greater biodiesel production is driving the placement of additional land under oil palm cultivation. In areas where growing conditions are not optimal, higher quantities of potassium and phosphate fertilizers will be required along with agribusiness technologies to improve water and nutrient uptake as well as to cope with abiotic stress in the instance of drier or cooler conditions triggered by the advent of an ENSO weather pattern.

Soybean: An enduring challenge for Southeast Asia’s food self-sufficiency

Soybeans are the most internationally traded food commodity, with approximately 75% [Ref. 35] of soybeans going toward the production of animal feed and 5% to biofuels and industrial production. Indeed, soymeal accounts for about two-thirds of the inputs in global animal feed production. The remaining 20% of global soybean production is for human consumption [Ref. 36], primarily in Asia where soy-based products like tofu and tempeh play a central role in Asian cuisines. Soybeans require a specific set of growing conditions that severely limits the geography of production. While requiring heat and humidity, the soy plant typically will not flower in temperatures over 40 degrees Celsius. Too much water reduces the nutrient uptake by the roots while soy has difficulty coping with abiotic stress of drought conditions as well as pests. Although soybeans are a staple of Asian cuisines, most exports come from the Americas, with Brazil, the United States and Paraguay accounting for over 90% of global soy exports [Ref. 37]. Worried about the security of global supply chains, Asia nations have initiated programs to boost domestic soy production, representing market opportunities for agribusinesses whose products can boost the yield and efficiency of soy production.

For Southeast Asian nations, achieving greater self-sufficiency is an even more dire matter of national interest because of the concern that their mammoth northern neighbour China will horde supplies on the global market. Already China possesses about 33% of global soybean stocks [Ref. 38]. China consumes about 60% of all exported soybeans [Ref. 39], as it covers only about 12% of its soybean demand from domestic production [Ref. 40], almost all of which is dedicated to human consumption. While Beijing is attempting to increase domestic soy production China does not possess sufficient suitable land or enough water. Although Indonesia and the other ASEAN nations that are seeking food self-sufficiency have made increasing soy production a top national priority, none have so far have achieved their goal.

The road ahead for agribusiness in Southeast Asia

Over the next 20 years, many of the most robust market opportunities for global agribusiness will be found in Southeast Asia. A region of rising middle-income economies, the major Southeast Asian nations are implementing initiatives to achieve agri-food self-sufficiency to ensure adequate and affordable food supplies to meet the soaring demand of their growing populations. These initiatives require fertilizers and other agribusiness solutions to increase agricultural productivity and efficiency.

Already among the world’s top 10 rice exporting nations, the major Southeast Asian rice exporters will need to increase rice production to meet their own rising domestic demand for affordable supplies of the staple grain as well as that of their ASEAN neighbours. The nations of the region will similarly need to increase their maize output to boost domestic and regional animal feed production to meet the rising demand for pork and poultry as the region’s growing middle-class populations acquire the appetite and greater purchasing power to consume more animal protein. The demand for feed grain is even higher in those Southeast countries with robust aquaculture export sectors.

The increased energy demand required to sustain the region’s advancing economies and growing populations has led Southeast Asian nations to ramp up the production of biofuels as a secure, green energy source. Relying on first-generation biofuels from food crops as a major part of the region’s energy transition, the nations of Southeast Asia will need to further increase crop yields to avoid the ‘food versus fuel’ dilemma – particularly in the case of ethanol which uses either maize or sugar cane (in the form of molasses) as a feedstock. Southeast Asia also boasts some of the world’s largest producers of biodiesel, derived primarily from oil palms. Boosting oil palm production also forms a national agricultural priority for many countries in the region. The most enduring challenge for Southeast Asia has been to achieve self-sufficiency in soybean production – essential for human consumption in the form of tofu and tempeh as well as a vital input for animal feed.

To increase the production of these crops, the nations of Southeast Asia will require greater quantities of potassium and phosphate fertilizers combined with agribusiness technologies to improve water and nutrient uptake. Achieving greater agrifood output will also require agribusiness solutions to cope with the considerable abiotic stresses of the extreme weather events regularly triggered by the El Nino-Southern Oscillation weather pattern.

When it comes to market opportunities for agribusiness technologies, the road ahead runs through Southeast Asia. Those agribusiness firms nimble enough to get out in front and travel that road first will reap the greatest benefit. In an increasingly competitive global marketplace, agribusiness companies without first-mover advantage in developing a route to market in Southeast Asia may finds themselves crowded out.

Professor Michael Tanchum is CEO of Nexus ForesightTM and teaches Universidad de Navarra. He is also non-resident fellow in the Economics and Energy Program at the Middle East Institute in Washington, D.C. and a research fellow at the Centre for African Studies at the Nanyang Business School, Nanyang Technological University, Singapore. You can follow him on X @michaeltanchum.

Professor Tanchum will be delivering an in-person seminar at the 23rd New AG International Annual Conference in Bangkok, Thailand 29 April – 1 May 2025.

List of references found in March/April 2025 issue, available free-to-view, here.

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