Indonesia’s Bulog looks to supply 10 percent of soyabean demand from 2014

September 20, 2013


Indonesia’s state food procurement body Bulog will look to supply 10 percent of the country’s soyabean demand from next year, the chief executive said, increasing the role of the state in one of the country’s growing food import markets. Indonesia relies on imports for 70-80 percent of its annual soyabean demand of around 2.5 million tonnes, and has seen stocks and imports dwindle due to a falling rupiah, rising international prices and a backfiring government policy.

Global prices traded at near 11-month highs last week due to concerns over dry weather in top supplier the United States, making imports more expensive for Indonesians who use the oilseed to make soyabean-based staple foods tofu and tempe. Indonesian tempe and tofu makers went on strike this week to protest against rising soyabean prices. “For this year maybe not yet,” Bulog CEO Sutarto Alimoeso told Reuters when asked whether the agency was ready to enter the soyabean supply chain. “Maybe next year (we) should have the power for that. Bulog should handle around 10 percent of total consumption.

“We hope there are local purchases but this is very low compared to total consumption.” Although Indonesian soyabean imports are small compared to the world’s top buyer China, demand is likely to climb as wealth and population levels increase and eating habits change. Earlier on Wednesday, Indonesian Trade Minister Gita Wirjawan told reporters that 1.1 million tonnes of soyabean import permits had been issued for the year to date.

Major soyabean importers in Indonesia include Sungai Budi Group, Cargill Inc and FKS Multi Agro Tbk. After global food prices spiked last year, the Indonesian government agreed to extend Bulog’s role beyond rice, to include soyabeans, sugar, beef and corn.

To date, Bulog had received government import permits for 100,000 tonnes of soyabeans which were unrealised so far, Alimoeso added, and 3,000 tonnes of beef import permits of which 1,100 tonnes had been realised. Soybean suppliers in the United States, Brazil, Argentina and Paraguay were being sounded out, Alimoeso said. Shortages of beef caused a corruption scandal this year, while garlic and onion prices have also spiked and come under the scrutiny of the local competition and monopolies commission.

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