Tri Listiyarini, Jakarta – Indonesia faces a growing dilemma over soybeans, as the country remains heavily dependent on imports while domestic production costs are too high to make local farming economically attractive, according to an agricultural expert.

Around 94% of Indonesia's soybean demand is still supplied through imports, leaving domestic prices highly vulnerable to global market fluctuations and geopolitical tensions.

Dwi Andreas Santosa, a professor at Bogor Agricultural University (IPB), said soybean prices in Indonesia are largely determined by international market movements.

Last year, international soybean prices were still around Rp 6,900 per kilogram, but escalating tensions in the Middle East have since pushed soybean prices in Indonesia above Rp 10,000 ($0.57) per kilogram, he said.

At the same time, Indonesian farmers interested in growing soybeans face production costs ranging from Rp 10,000 to Rp 13,000 per kilogram – significantly higher than global market prices.

Given those costs, Andreas said the government would need to guarantee a minimum farm-gate purchase price of at least Rp 15,000 per kilogram to make soybean cultivation financially viable for local farmers.

"The key to soybean self-sufficiency lies in the selling price at the farmer level. The government must maintain prices that are profitable for soybean farmers," Andreas said.

He pointed to South Korea as an example, noting that the government there maintains local soybean prices at around Rp 55,000 per kilogram to ensure farmers can earn a decent living.

"Indonesia could follow South Korea's model if it truly wants soybean self-sufficiency," he said.

Still, Andreas acknowledged the policy dilemma facing authorities because imported soybeans currently cost only around Rp 7,000 per kilogram at Indonesian ports.

"If production costs are already Rp 10,000 to Rp 13,000 per kilogram, then the government must set farm prices at least at Rp 15,000," he said.

He warned that soybean self-sufficiency would remain nearly impossible as long as Indonesia continues importing large volumes of the commodity.

"If soybeans continue to be imported, why would farmers grow them? They are better off planting mung beans, which have similar productivity but can sell for Rp 20,000 per kilogram. Farmers are also economic and realistic actors. Why work if there's no profit?" Andreas said.

In addition to setting favorable price benchmarks for farmers, the government could also regulate imports through tariff policies, he added.

"At present, soybean imports carry a 0% tariff, just like wheat," Andreas said.

Earlier this month, the National Food Agency (Bapanas) said domestic soybean supplies remain secure and that importers had committed to maintaining stable prices.

Import-level soybean prices currently remain below the government's benchmark price of Rp 10,200 per kilogram.

Kelik Budiana, head of the agency's Food Data and Information Center, said the government has taken extensive measures to prevent price volatility amid global geopolitical uncertainty affecting soybean markets.

"Soybean supply remains secure through July. Strengthening domestic soybean production and distribution is being carried out to achieve self-sufficiency by expanding planting areas and increasing cultivation points, while ensuring price certainty so farmers remain motivated to plant," Kelik said.

Government data show that soybeans, garlic, and beef remain Indonesia's most import-dependent food commodities.

Under the National Food Balance Projection for 2026, Indonesia plans to import 2.57 million tons of soybeans this year because domestic production is projected at only 311,429 tons, compared with the annual demand of 2.74 million tons.

That means nearly 94% of Indonesia's soybean needs are expected to be met through imports.

Source: https://jakartaglobe.id/business/indonesia-faces-soybean-dilemma-as-imports-dominate-domestic-suppl