Rising soybean prices are raising concerns among local producers and traders that the cost of production for local staples such as tahu and tempeh could rise astronomically.
Because of extremely hot weather in the United States, the production of soybeans has dropped significantly this year, creating a worldwide shortage. Indonesia, which imports soybeans, has imposed a 5 percent import tax to encourage domestic production.
Prices of such commodities have risen 33 percent during the past three weeks to Rp 8,000 (85 cents) per kilogram. The sharp spike in the price has once again raised questions of food security especially given global warming and dramatic changes in weather patterns.
But after protests by local producers and clashes in several wet markets in Jakarta, the government plans to remove the 5 percent import duty on soybeans on Aug. 1. This will help alleviate the immediate tension but will not solve the longer-term problems. It is critical that the government adopts a nimble and flexible policy stance to deal with the situation.
It is clear that the government will have to go further to defuse the situation as news of scrapping the import duty did not persuade tahu and tempeh producers to help to abandon their plan to halt production. There have also been reports of sweeping carried out by members of the Indonesian Tempeh and Tofu Cooperative (Kopti) to halt the sale of the soy products.
We do not condone such action as no one should be coerced into selling or prevented from selling food products, especially important staples such as tempeh and tahu. It is urgent that the government gets on top of the situation before it explodes into social tension. When food is scarce, especially during the fasting month, tempers can rise fast.