Ferry Yuniar, Olena Wibisana, Erfan Maruf, Jakarta – Tofu and tempeh producers in Indonesia are struggling to cope with soaring imported soybean prices as the weakening rupiah and global supply chain disruptions drive up production costs across Southeast Asia's largest economy.

For millions of Indonesians, tofu and tempeh are not specialty foods but daily staples. The soybean-based products are among the country's cheapest and most widely consumed protein sources, particularly for lower- and middle-income households. As prices rise, the impact is felt directly in household kitchens, traditional markets and small neighborhood food stalls across the archipelago.

Imported soybean prices have climbed to around Rp 11,000 ($0.62) per kilogram in several regions, up from the normal range of about Rp 9,000-10,000, forcing many small-scale producers to shrink product sizes, cut output, or raise prices to stay afloat.

The pressure highlights Indonesia's heavy reliance on imported soybeans, which account for nearly 90% of national demand. Most imports come from the United States, Brazil and Argentina.

In Serang, Banten province, tofu and tempeh makers said rising soybean and packaging costs were squeezing already thin profit margins.

Budi, a tofu producer in Pejaten, Serang, said his daily soybean consumption had fallen from about 200 kilograms to between 100 and 150 kilograms as costs surged.

"To keep making a profit, we have reduced product size, cut production, and increased selling prices," Budi said.

He said tofu prices had risen from around Rp 17,000 to Rp 19,300 per tray.

Some producers have opted not to raise prices sharply for fear of hurting consumer demand, instead reducing the size or weight of tofu and tempeh products.

In Gunungkidul, Yogyakarta, tofu factory owner Agung Gunawan said he had switched to cheaper soybean brands and reduced ingredient portions to lower costs, although product quality had been affected.

"Usually one box contains 250 grams, now we make it around 220 grams," Agung said.

Despite the rising costs, demand for tofu has increased in recent weeks, partly driven by local harvest festivals and Indonesia's free nutritious meal program, he added.

Tempeh producers in Jakarta reported similar difficulties. Ardy Firmansyah, a tempeh maker in West Tebet, said many businesses could not fully pass on higher costs to consumers because purchasing power remained weak.

"If we raise prices too much, customers may stop buying, so many producers reduce the contents instead," he said.

The rupiah has weakened toward Rp 18,000 per US dollar in recent weeks, sharply increasing import costs. Economists say the currency's weakness reflects not only global volatility fueled by escalating Middle East tensions, but also deeper domestic challenges, including fiscal pressures, weakening external balances and declining foreign exchange reserves.

On Monday morning, the rupiah traded around Rp 17,726 per US dollar, according to Bloomberg data.

Bank Indonesia last week unexpectedly raised its benchmark interest rate by 50 basis points to 5.25 percent in an effort to stabilize the currency amid global market volatility linked to escalating conflict in the Middle East.

The Indonesian Chamber of Commerce and Industry (Kadin) warned that the weakening rupiah could further increase prices of imported consumer goods and everyday products that still depend heavily on imported materials and logistics.

"The weakening exchange rate increases procurement costs, logistics expenses and foreign currency payment obligations, putting pressure on business cash flow and profitability," Kadin deputy chairman for industry affairs Saleh Husin said.

Source: https://jakartaglobe.id/business/thinner-tempeh-indonesias-weak-rupiah-hits-the-dinner-tabl