ADVERTISEMENT

ADVERTISEMENT

Indonesia mulls soybean import tariff to protect farmers

By Michael Taylor and Bernadette Christina JAKARTA - Indonesia is considering a 10 percent import tariff for soybeans and may establish a new floor price for the protein staple in its latest move to push self-sufficiency in food production. Indon...

2046202+AsiaNews.jpg

By Michael Taylor and Bernadette Christina

JAKARTA - Indonesia is considering a 10 percent import tariff for soybeans and may establish a new floor price for the protein staple in its latest move to push self-sufficiency in food production.

Indonesian President Joko Widodo, now in power about a year, is pursuing ambitious targets for local production of various foodstuffs, and curbs on imports have been blamed for higher rice, beef and sugar prices.

Earlier this year Indonesia temporarily stopped issuing import permits for corn used in feedmills, and the fast-rising food prices have clipped Widodo's approval ratings.

 

ADVERTISEMENT

Indonesia is the fifth biggest buyer of soybeans and is forecast to import 2 million-2.3 million tonnes this year, little-changed from 2014.

The current import tariff is zero, but faced with low local prices, Indonesian agriculture ministry officials told Reuters that the ministry had proposed a 10 percent tariff to protect local farmers from cheap imports.

"We're proposing a (higher) soybean floor price and import tax," said Hasil Sembiring, director general of food crops. "If this doesn't worked, we may ask for (mandatory) purchases of local soybeans (from importers)."

The Southeast Asian nation usually imposes a 5 percent import tariff on soybeans, although it is often temporarily scrapped when domestic prices rise.

The government currently sets a reference or floor price for various foods to ensure local farmers maintain supplies, although the actual market prices are often less than the government-set price.

The current soybean floor price, for instance, is 7,700 rupiah ($0.56) per kg, while the market price is between 4,000-5,000 rupiah per kg. Agriculture ministry officials are now proposing a 8,500 rupiah per kg benchmark.

Soybeans are mainly used by makers of soybean-based staple foods tofu and tempe in Indonesia, with most shipments coming from the United States.

Aip Syarifuddin, chairman at the Indonesian Tempe and Tofu Cooperative Association told Reuters imported soybeans are bigger and cheaper than those grown locally and are therefore favoured by tempe makers.

ADVERTISEMENT

Widodo's government has also done nothing to increase soybean production, said Syarifuddin, adding that more land, better storage and irrigation, and easier access to fertilizers and financing was needed to make a difference.

Indonesia's statistics agency has forecast domestic soybean production at 998,870 tonnes this year, up from 955,000 tonnes in 2014.

Industry estimates often differ greatly from government forecasts, and industry officials have put this year's soybean production at 500,000-700,000 tonnes.

Around 20 companies have soybean import permits, including the Sungai Budi Group, Cargill Inc and FKS Multi Agro Tbk.

Related Topics: CROPSSOYBEANS
What To Read Next
Commercial farmers in Nebraska, the Dakotas, and Minnesota start using drones for spraying, seeding.
This week on AgweekTV, we hear about North Dakota corporate farming legislation and about WOTUS challenges. Our livestock tour visits a seedstock operation and a rabbit farm. And we hear about new uses for drones.
Kevin and Lynette Thompson brought TNT Simmental Ranch to life in 1985. Now, their daughter, Shanon Erbele, and her husband, Gabriel, are taking over the reins, and their sale is for Feb. 10.
Gevo will be making sustainable aviation fuel in Lake Preston, South Dakota. Summit Carbon Solutions plans to capture carbon emissions from the facility.