Stabilizing Domestic Soybean Prices, Observer Suggests Indonesia To Import From Brazil And Argentina

Illustration. (Photo: Doc. Antara)

JAKARTA - As the second-largest soybean consuming country in the world, Indonesia needs to find alternative sources of soybean suppliers.

According to Center for Indonesian Policy Studies (CIPS) researcher Nisrina Nafisah, Indonesia can increase its imports from Brazil and Argentina. Through this diversification of soybean supplying countries, Indonesia can reduce the impact of price increases and maintain stability in domestic soybean supply and prices.

"The government needs to diversify import sources so that prices and the amount of domestic soybean supply are stable. Indonesia is the country with the second-largest soybean consumption in the world after China," she said in a statement quoted by Antara, Thursday, February 17.

Soybean production in the two countries reached 140 million tons and 50 million tons annually. The number of Indonesian soybean imports from these two countries is less than one percent of Indonesia's total imports each year. Indonesia will not even import soybeans from either of them in 2020.

This, she continued, opens up opportunities for greater cooperation, especially to meet the availability of soybeans, which have been dominated by soybeans from the United States.

Nisrina said that Indonesia is exploring economic cooperation with Latin America and the Caribbean, which are Indonesia's non-traditional markets.

Economic cooperation with countries in the region has begun to be strengthened because it can open up opportunities for Indonesia to share its soybean import quota with Latin American countries such as Brazil and Argentina.

More than 80 percent of Indonesia's soybeans come from imports every year.

Data from the Central Bureau of Statistics (BPS) shows that around 90 percent of Indonesia's soybean imports for 2020 will come from the United States, amounting to 2.238.5 tons out of a total of 2.475.3 tons of Indonesian soybean imports.

Canada is the second largest source of imports for Indonesia with imports reaching 229.6 thousand tons in 2020.

Data from the United States Department of Agriculture (USDA) shows that the increase in soybean prices in the international market was caused by several factors, such as reduced world soybean supply due to weather changes that disrupted soybean production in major producing countries, namely the United States, Brazil and Argentina.

These three countries produce about 80 percent of the world's soybean production (Voora et al., 2020).

Since December 2021, soybean production has fallen by seven percent in Brazil and nine percent in Argentina. Despite the decline in production, both countries are still the main producers of soybeans in the world.