Indonesia's state procurement body Bulog is sounding out US government officials about securing soyabean imports, an industry association official said, as the Southeast Asian country looks to bolster its defences against food inflation.
After the worst US drought in 56 years, Chicago soyabean prices hit an all-time high earlier this year, prompting the Indonesian government to scrap its 5 percent import tariff. As part of efforts to tackle rising global food prices, Indonesia then extended the role of Bulog beyond rice in order to build bigger food stockpiles.
Bulog has been in talks with officials at the US embassy in Jakarta about securing soyabean supplies, Ali Basry, director of the Indonesia representative office for the American Soybean Association (ASA), said in an interview. "If Bulog is ready to make a soyabean purchase, it should start buying now instead of waiting," added Basry, who has more than 30 years experience in the soyabean industry. "It's easy for prices to go up, rather than go down."
Consumers are expected to pay 3 to 4 percent more for food next year, after a severe drought decimated US crops this year, the US Department of Agriculture said. Indonesia uses soyabeans as a protein-rich substitute for costlier meat. Domestic producers of soyabean-based staple foods tofu and tempe had threatened to go on strike in July, and although few details of Bulog's new role are known, its remit would be to help protect domestic farmers by setting a minimum price and aid consumers with a price ceiling.
Bulog was talking about setting a 7,000 rupiah ($0.73) per kg floor price for Indonesian farmers, Basry said, noting that wholesale prices in Indonesia were currently 7,000 rupiah while US imports sold at between 6,850-6,900 per kg.
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