Indonesia is considering allowing national procurement agency Bulog to import soyabeans and build up stocks, the agriculture minister said, as the country looks to blunt the impact of rising global prices on its food industry. US soyabean futures rose to a record high last month, after the worst drought in 56 years started boosting prices about a month and a half ago.
"Bulog would have the authority to procure soyabeans from both local and overseas suppliers to strengthen national soyabean stocks," Agriculture Minister Suswono said late on Thursday. A floor price would be set for Bulog to buy from domestic soyabean farmers, and the agency would sell its stocks when prices reached a set ceiling, he added.
Bulog already controls rice imports in the archipelago. Annual Indonesian soyabean consumption is forecast to rise by as much as 5 percent to about 2.7 million tonnes this year, with imports accounting for 80 to 90 percent of that amount. The country, which imports most of its soyabean from the world's top exporter the United States, scrapped its 5 percent import duty on soyabeans last month for the whole of 2012.
"We are talking about a very tight global market at the moment, so if anyone does want to come in and start securing US imports, they are going to have to compete with China," said Michael Creed, an agribusiness economist for National Australia Bank. "China have quite big pockets when it comes to securing food supplies." Last week, the Indonesian unit of global agribusiness Cargill, which imports about 250,000 tonnes of soyabeans per year, said Indonesia had between 50 and 60 days of soyabean inventory.
Indonesian producers of soyabean-based staples, tofu and tempe, say prices of the protein-rich foods have climbed about 50 percent this year. "Of course the program will cost a lot of money and for this objective, the government has to provide the funds from its budget," Suswono said. Suswono said he hoped the government would set the soyabean import tariff at 30 percent when it is re-introduced next year. The National Soyabean Council has also urged the government to increase soyabean import duties to 27 percent and make further investments in domestic soyabean farming.
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