Jakarta (ANTARA News - The Indonesian government is considering fixing soybean prices in another bid to control surging prices which have hurt the local food industry, an agriculture ministry official said late on Thursday.
Baran Wirawan, a food crop expert who held talks with soybean importers, said the government had not decided on the exact price, but it could be between 5,500-6,000 rupiah a kilogram.
"The government may impose a price reference for soybean in the domestic market. Consequently, there would be a rule to regulate the soybean market."
U.S. soybean futures have rallied in the past weeks, with the July soybean contract on Chicago Board of Trade at an all-time high of $13.76 a bushel on Monday.
Surging soybean prices have hurt Indonesia's food industry as the country still imports nearly 70 percent of its soybean requirements.
Soybeans are used mainly in the food industry and processed into tofu and soy sauce. The industry is dominated by small and medium-sized companies.
Soaring soybean prices have boosted soybean prices in the local market to 7,500-7,600 rupiah a kilogram, up from 3,450 rupiah a kilo in early January.
Wirawan said the government will give importers time to adjust their import costs and selling price if the new plan is implemented
"If this doesn't work, we will assign Bulog to import and distribute soybeans," he told Reuters.
The government has said it may assign state procurement agency Bulog to import soybeans although there's no official plan yet on the table.
Local soybean stocks are around 250,000 tonnes, which is enough for two months of consumption, Wirawan said.
Indonesia imported around 80-90 percent of its total 2007 soybean imports of around 1.4 million tonnes from the United States, according to data from the Indonesian office of the American Soybean Association.
The rest came from Argentina.
On Monday, the Indonesian government scrapped a 10 percent import duty on soybeans to offset soaring soybean prices.
To reduce dependence on imports, the country plans to boost domestic soybean output to 900,000 tonnes this year, Agriculture Minister Anton Apriyantono said on Tuesday.
The country produced an estimated 608,260 tonnes of soybeans in 2007. (*)