Bandung, IndonesiaSentinel.com — Indonesia is poised to capitalize on the commercial potential of kratom leaves by encouraging the downstream development of products derived from the plant, as global demand for the plant continues to surge.
Minister of Cooperatives and Small and Medium Enterprises (MenkopUKM), Teten Masduki, highlighted the significant financial benefits of processing kratom into more refined products, with the extract alone valued at up to IDR 90 million (Roughly USD $6,000) per kilogram, said to be Indonesia’s “Green Gold”.
Known for its medicinal and therapeutic properties, kratom leaves have become a valuable export commodity, primarily used in the food, beverage, and pharmaceutical industries. The Indonesian government is now focusing on expanding its kratom export market while establishing its down streaming processes to support sustainable growth.
Health Benefits of Kratom Extract
Kratom, derived from the leaves of the Mitragyna speciosa tree, has long been used in traditional medicine throughout Southeast Asia. Its extract contains alkaloids that are believed to have pain-relieving, anti-inflammatory, and mood-enhancing effects. In recent years, kratom has gained popularity in the U.S. and Europe as an herbal supplement, particularly for its potential to manage chronic pain and alleviate symptoms of opioid withdrawal.
“Kratom’s potential goes beyond traditional uses. It can be utilized in industries ranging from pharmaceuticals to energy drinks,” said Teten Masduki, Indonesia’s Minister of Cooperatives and Small and Medium Enterprises (MenkopUKM). “Its extract, priced at IDR 90 million (USD $6,000) per kilogram, offers significant economic value, far exceeding the price of raw kratom leaves.”
Growing Export Market
Indonesia has emerged as a leading supplier of kratom, with exports seeing consistent growth over the past few years. According to data from the Ministry of Trade, Indonesia’s kratom export value has increased at an annual rate of 15.92% since 2019. The United States remains Indonesia’s largest export market for kratom, accounting for 66.3% of total kratom exports during the January-May 2023 period, valued at USD $4.86 million.
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“Kratom is a rapidly growing industry, and the U.S. is our main market, but we are also seeing rising demand from Europe and India,” said Yohanis Walean, CEO of Koprabuh Indonesia, a cooperative specializing in kratom production. “We expect exports to continue growing as more countries recognize the health benefits of kratom and the potential for its extract to be used in a variety of products.”
New Export Regulations
As the kratom export market expands, the Indonesian government has implemented new regulations to ensure the safe and responsible trade of the commodity. The Ministry of Trade recently issued guidelines that clarify export procedures and establish quality standards for kratom products.
Under these regulations, kratom producers must adhere to stringent quality control measures to ensure their products meet international safety standards, including testing for contaminants such as E. coli and heavy metals. These measures are designed to address past concerns, such as the U.S. ban on kratom imports due to contamination issues, rather than concerns about kratom itself being classified as a narcotic.
“The new regulations provide much-needed clarity and ensure that Indonesian kratom can be safely exported to international markets,” said Teten Masduki. “This not only helps protect consumers but also boosts the reputation of Indonesian kratom as a high-quality, reliable product.”
The Future of Kratom in Indonesia
Indonesia’s efforts to promote the downstream development of kratom products are also gaining traction. By investing in processing facilities and technology, the government aims to move away from raw material exports and focus on producing high-value kratom extracts. The cost to set up a kratom extraction facility is estimated at around IDR 10 billion ($667,000), with the extraction equipment itself costing approximately IDR 3.5 billion ($233,000).
“This is an opportunity for Indonesia to lead the global kratom market,” said Teten. This way Indonesia can empower small and medium enterprises (SMEs) to develop kratom-based products, adding value to our natural resources and creating more jobs.
As the global demand for kratom continues to rise, Indonesia is well-positioned to become a key player in the industry. The government’s proactive approach to regulation, coupled with investments in product development, could turn kratom into one of the country’s most lucrative exports, further diversifying Indonesia’s economy.
With the U.S. and Europe leading the demand, and with the proper regulations in place, Indonesia is set to reap the benefits of its “green gold” in the years to come.
(Raidi/Agung)
