Indonesia’s Soybean Importers Accused of Behaving Like Cartels

By webadmin on 08:55 am Jul 30, 2012
Category Archive

Markus Junianto Sihaloho& Ezra Sihite

The contentious issue of increasingly expensive soybean imports has now turned to the handful of companies allowed to import the crop, amid allegations of official involvement in sustaining their cartel-like behavior.

Bambang Soesatyo, a member of the House of Representatives, said on Sunday that the government had no basis to criticize the importers for maintaining high profit margins at a time of soybean scarcity.

“There are indications that government officials abused their authority to give these importers a monopoly, so before punishing the importers as the administration of President Susilo Bambang Yudhoyono is calling for, we should first go after the officials who made the cartel possible,” Bambang said.

The Golkar Party politician added that the government should also have been able to plan for the soybean shortage caused by the US drought, but was powerless to act accordingly because of the alleged collusion between the importers and the officials.

“Of course the importers must have bribed the officials to disregard their projections about the impact of the US drought. The KPK can use this indication of corruption to start investigating this matter,” he added, referring to the Corruption Eradication Commission.

The cartel claims were first raised by Suyanto, the chairman of the Indonesian Tempeh and Tofu Cooperative (Kopti).

“There are four big companies and they set the price,” he said last week, adding that he thought the companies manipulated prices unfairly, though he admitted it would be difficult to prove.

He declined to name the companies, but he collectively termed them a “cartel.”

Cargill Indonesia, one of the main soybean importers in Indonesia, dismissed Suyanto’s accusations.

“Cargill does not go into price discussions or agreements with other importers and traders,” Jean-Louis Guillou, Cargill’s country representative for Indonesia, told the Jakarta Globe in an e-mail. “We fully abide by Indonesian law and this includes not artificially influencing import prices.

“Cargill shares the concerns about increasing commodity prices impacting local Indonesian consumers.”

The soybean debate has also prompted the government to temporarily ease the import duty for the commodity from 5 percent to zero.

However, legislators say the plan is a stop-gap measure and argue that a longer-term food security policy is needed.

Siswono Yudohusodo, a former agriculture minister and member of House Commission IV, which oversees agricultural affairs, said the government should use the high prices to stimulate local production of the crop.

“We should never again use the old paradigm of pushing down the import duty in the event of a price increase,” he said. “That will only keep us dependent on imports.”

Siswono said Indonesia currently has just 600,000 hectares of soybean plantations, down from 1.6 million hectares in 1988, and needs policies to revive production.

Firman Subagio, deputy chairman of House Commission IV, agreed that easing the duty tax would be counterproductive to efforts to boost food security.

He also said that if the import duty remained at zero percent until December, Indonesia could lose Rp 400 billion ($42 million).

“The only ones who benefit are the importers, because the stock they’re bringing in was bought at old prices,” Firman said.