Wed, 16 Jan 2008
From: Antara News
By The Jakarta Post, Jakarta
To curb the surging price of soybeans, legislators suggested Tuesday the government scrap its policy limiting the number of designated importers.

The policy is considered a major factor for the skyrocketing prices.

"About 70 percent of soybeans in the country are imported," said Hasto Kristianto, a member of the House of Representatives' commission VI for trade.

"If the number of importers is increased, the price is expected to decrease due to tighter competition," Hasto said.

There are only four soybean importers in Indonesia, including U.S.-based Cargill, PT Teluk Intan, PT Gunung Sewu and PT Liong Seng.

They import approximately 1.3 million tons of soybean per year to meet the country's 2-million-ton need.

The price of soybeans has almost tripled from Rp 2,750 (28 U.S. cents) per kilogram in January 2007 to Rp 7,800 on Tuesday, igniting protests from thousands of tofu and tempeh producers who use soybeans as a raw material.

Indonesian Farmers Union (SPI) chairman Henry Saragih said the surge of domestic prices had been triggered by rising prices of soybeans in the United States.

The U.S is Indonesia's main source of the commodity and prices have currently reached $600 per ton, Henry said.

But Hasto said the price of soybeans in Indonesia was far more higher than in the U.S., indicating a possibility of cartel practicing, which he said should be addressed by the government.

"For instance, the government can involve the State Logistics Agency (Bulog) in stabilizing the price of soybeans, as the commodity is very important for the people," Hasto said.

While agreeing with the government's move to eliminate import tariffs on soybeans, he said the government should support farmers with incentives to grow the commodity.

On Monday, the government lifted the 10 percent import duty on soybeans to ease resentment among tofu and tempeh producers.

Ganjar Pranowo of the House's commission IV also said the government should encourage farmers to plant soybeans, which he said would increase domestic production and stabilize prices.

"The country must produce at least 75 percent of the soybeans it needs so it does not have to depend on imports," he said.

Legislator Zulkiflimansyah said the government should assign Bulog to look for cheaper soybean products from other countries if the price in the U.S. kept increasing.

Macroeconomic planning director at the National Development Planning Agency (Bappenas), Bambang Prijambodo, said increasing prices might trigger inflation if the government did not immediately address the problem.

Last year, prices of staple foodstuffs rose by 2.82 percent, according to the Central Statistics Agency (BPS). The country's inflation figure during 2007 was 6.59 percent. (adt)



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