Soybean-Loving Indonesia Missing Out on Cheap Prices

August 26, 2013, 7:20 AM
By Sameer C. Mohindru

Indonesia is missing out on cheap soybeans made possible because of bumper harvests around the globe.

The reason?

Southeast Asia’s largest importer of soybeans set quotas and price ceilings in June on imports to try to stabilize prices, while retaining the 5 percent import fee imposed since start of the year. The results, experts say, have been higher prices, fewer soybeans, and angry tofu and tempeh sellers on the streets of Jakarta and other Indonesian cities. Soybeans are used to make tempeh and tofu, a staple diet for millions of Indonesians.

“I have to cut the size of the tempeh because I can’t increase the prices,” said Jakarta tempeh-seller Surono, who like many Indonesians goes by only one name. He said he fears that if he increases his prices, consumers won’t buy from him.

Meanwhile, because of the new policies, traders say they are reluctant to sign new contracts for imports and that their shipments are delayed

“We are worried, because if [a] government license is not obtained by the time the ships with imported soybeans arrive, it will be stuck at the ports and result in heavy losses,” said Andreas Eko, who owns PT Kapuas Lestari, a Jakarta-based soybeans trading company.

Soybean prices in the Jakarta’s wholesale market have increased 12% in the past one week and are now selling around IDR8,300 (US 77 cents) per kilogram. But outside of Indonesia, global soybeans prices have dropped by around 28% from the record high hit a year ago.

U.S. soybeans are now offered at prices equivalent to IDR6,600 per kilogram when delivered at Indonesian ports. The price is expected by traders to decline further as the U.S. reaps a bumper harvest from mid-September. But importers say the quotas, fees and price ceilings by the government keep them from benefiting.

“If the government is really serious about keeping a check on prices, it should do away with the 5% import tax on soybeans,” Mr. Eko said.

The policy’s origins go back to last year when global soybean prices were at record high.

When prices soared, some hawkers in Jakarta, selling tempeh and tofu, took it off the menu and staged protests. They argued the prices were simply too high for them to be able to sell it to willing customers and still make a livelihood.

In response, the Indonesian government rolled in a complex price controls system in which soybean importers would be issued licenses and given quotas and wouldn’t be able to sell the beans to tempeh and tofu manufacturers above a ceiling price.

The government – through its logistics and crops procurement and importing agency, Bulog – argued that by setting a high price for buying soybeans from local growers, it would encourage them to increase output. To insulate the consumers from higher prices, it set a fixed ceiling — a price above which traders can’t sell soybeans in the domestic market. The current ceiling is IDR7,835 per kilogram, though it is not applicable to soybeans already brought in before the program was started. The prices will be revised every month, based on the price of imported soybeans and exchange rates.

“The program’s objective is to increase local production and at the same time ensure that local consumers get the beans at reasonable rates,” said a Bulog official who spoke only on condition of anonymity. Indonesia imports more than 70% of to meet its soybean demand.

A company will be given a quota on how much it can imort based on the proportion of locally produced soybeans it purchases from Bulog.

But Robert, who goes by only one name and is the procurement and trading manager at PT Jakson Niagatama, a soybeans importing company in Jakarta, says, “There are hardly any beans available in the domestic market. And that is precisely why we are importing in the first place.”

John Lindblom, the regional director for Southeast Asia at the American Soybean Association, said the government’s goal was to control inflation – to keep the soybean prices from going too high.

“But it can end up doing the opposite,” he said, by creating a scarcity of soybeans because not enough are getting into the country and at the same time domestic production isn’t making up the difference.

John Baize, a Washington-based agriculture consultant who advises Southeast Asian companies, is concerned that the government might sell its soybean stock in the domestic market, driving prices down below levels which private companies have already agreed in contracts to buy foreign soybeans. If that happens, the companies “will be in trouble,” he said.

Indonesia imports around 2 million metric tons of soybeans annually but shipments are expected to fall 5% this year, according to industry projections.

Traders and analysts cite the example of beef where a quota system has pushed up prices and bred corruption.

The size of the local soybean crop is uncertain. The Ministry of Agriculture estimates it will be about 900,000 tons annually while the London-based International Grains Council says it is around 600,000 tons.

“Most of Indonesia’s soybean crop is consumed where it is produced as part of subsistence agriculture,” says Mr. Lindblom.

I Made Sentana in Jakarta contributed to this article.

http://blogs.wsj.com/searealtime/201...heap-soybeans/

Lagi2 rakyat Indonesia harus membayar dengan mahal.
Saya lihat ini semacam plot oleh partai yg sok suci itu agar menciptakan kekurangan bahan pangan dan harga menjadi mahal, kemudian harus impor.
Dan mereka akan UNTUNG BESAR dari KOMISI IMPOR !!!!
MAKA HARGA AKAN SELALU MAHAL GAN !!!!

PARTAI BENALU !!!!
Rakyat sengsara, apa urusan.
Lebih penting mengeruk duit !!!