Most Indonesians generally know Argentina for its soccer and tango. But they don’t know that the main ingredient - soybean - in staple foods such as tempe, tofu and soy sauce comes mostly from Argentina.
In recent years, Indonesia has become one of the Asia’s biggest soybean importers - buying the food commodity mainly from Argentina, the US and Brazil - due to a rapid increase in consumption and sharp decline in domestic production. Surprisingly, Indonesia was a net exporter of soybeans between 1987 and 1996.
“In 2010, our soybean exports to Indonesia reached $852.25 million,” Argentinian Ambassador to Indonesia Javier A. Sanz de Urquiza told The Jakarta Post recently. “Soybean products constitute more than 80 percent of our exports to Indonesia.”
“Thanks to soybeans, our trade with Indonesia surpassed $1 billion mark for the first time - a record high,” he added.
Argentina’s total trade with Southeast Asia’s largest economy, Urquiza said, reached $1.14 billion in 2010. Indonesia suffered a huge trade deficit with Argentina as it exported $294.64 million worth of goods to Argentine and imported $852.25 million.
A quick analysis of trade growth between the two countries shows that bilateral trade has been growing at double digit rates, thanks to soybeans, during the last five years. Trade stood at $496.07 million in 2005 and surged to $823.15 million in 2009.
Soybeans, often described as the poor man’s meat and rich man’s favorite due to its high protein content, is a signature item on the dining table in most Indonesian households. The nutritious agricultural product is also used as in animal feed as well as fishmeal.
The price of soybeans has seen a recent surge to Rp 6,000 to Rp 8,000 per kilogram from Rp 4,000 a few months back. The increase has been blamed on poor weather in several soybean producing countries.
“Due to extremely wet weather, farmers in Aceh and East Java may not plant soybean crops this year and may shift to planting rice. So we may face soybean shortages this year,” deputy agriculture minister Bayu Krisnamurthy told news portal kompas.com last week.
The government set a domestic soybean production target of 960,000 tons for 2011. Indonesia’s soybean production last year stood at 800,000 tons, much shorter than the 2.4 millions tons needed, leaving Indonesia heavily reliant on imports.
To curb high prices, the government announced plans to lift import duties on the crop.
This leaves Argentina as an attractive source for the crop.
Argentina, Urquiza said, was the third-largest producer as well as exporter of soybeans after the US and Brazil.
“The quality of our soybean is very high and we are a reliable supplier,” he said.
Several importers also claim the transportation costs for soybean imports from Argentina are lower compared to other countries.