Soybean imports set to boost domestic supply, lower prices

ekonomi dan bisnis, politik dan hukum

Soybean imports set to boost domestic supply, lower prices

In a bid to boost domestic supply and eventually lower prices, the government has allowed the National Logistics Agency (Bulog) to import 22,000 tons of soybeans from top producers, Brazil and the United States, in November.

The import follows a government regulation issued on Aug. 28, which stipulates that soybean imports could only be conducted by Bulog, state-owned companies, cooperative and/or private entities that participate in the government-sponsored Soybean Price Stabilization Program.

Rito Angky Pratomo, Bulog’s director for business development and planning, said the agency’s swift action was made to meet high domestic demand.

“The Indonesian Tofu and Tempe Cooperative [KOPTI] has asked the government to stabilize the price by importing soybeans so that the tofu and tempe [soybean cake] sellers and producers can survive,” he said on Tuesday.

According to data from the Agriculture Ministry, domestic soybean consumption reached 2.5 million tons last year, while farmers could only produce 700,000 tons. Consequently, the country had to buy 1.8 million tons from overseas.

Rito said the low soybean production, as well as high demand, had caused the price of the commodity to surge from Rp 7,400 (US 67 cents) to Rp 10,000 per kilogram in September, the highest point in 2013.

Rito said Bulog had a responsibility to import soybeans to stabilize the price anytime the price of the commodity exceeded the normal price of Rp 7,400 per kilogram.

“If the soybean productions are abundant, we would then export them,” he said.

As soon as the soybeans arrive from Brazil and the United States, Rito said, the commodity would then be distributed directly to increase the supply in Bali, Jakarta, Medan, North Sumatera, Palembang, South Sumatra, Semarang, Central Java and Surabaya, East Java.

According to Rito, Bulog had also bought up to 125 tons of soybeans from local farmers as of October.

“We can buy more domestic soybeans, if the stock from the farmers is available,” he said.

Contacted separately, the chairman of the Indonesian Tofu and Tempe Producers Association (Gakoptindo) Aip Syarifudin told The Jakarta Post that the price of soybeans in the market had been decreasing.

“As of October, the price of soybeans in Java has decreased to Rp 8,200, down from Rp 10,000 in the previous month. Meanwhile, the soybean prices outside Java reached Rp 9,400, a decline from Rp 10,300 in September,” he said.

He added that the price of soybeans outside Java was still high due to the transportation costs.

Aip said that the strengthening rupiah from the US dollar had also impacted the decline of soybean prices as most local producers were using imported soybeans to make tofu and tempe.

Aip estimated that the price of soybeans would decrease further, after the soybean import duty removal regulation was implemented and the implementation would then boost the volume of imports.

To make tofu and tempe, the association had to import soybeans from the United States because the domestic production was low.

“I had been told by the Agriculture Ministry that the production of soybeans in Indonesia is increasing, however, whenever we check and visit the farmers in the field, the reality is different,” he said.

Taking an example, Aip mentioned two cases in soybean-producing areas in West Nusa Tenggara and Madura, where the productions were far lower that what had been reported by the Agriculture Ministry.

The Ministry claimed that farmers in Madura, East Java, had seen big harvests in which they successfully produced 400 to 500 tons of soybeans.

However, in reality, the tofu and tempe producers could only buy up to 9 tons of soybeans, he said.

Aip added that the government should create an industrial area for soybean farming like the United States had done to improve the quality and quantity of soybean production, as well as maintaining the price at the normal rate.

“Our soybean quality, actually, is much better than the commodities from the United States and Brazil,” he said. (tam)

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