How Geopolitical Tensions Could Push Tempe Prices Up
INDEF senior economist Tauhid Ahmad has highlighted Indonesia’s reliance on imports for several food commodities, which he says could trigger price spikes, especially amid rising global geopolitical tensions. One commodity that remains heavily dependent on imports is soybeans.
According to Tauhid, around 80 percent of national soybean needs are met through imports. ‘If imports exceed 70 percent or 80 percent. I see that for the tempeh industry, most is imported; we cannot use locally grown soy,’ Tauhid said at a press conference titled ‘US–Indonesia Agreement on Reciprocal Tariff: Analysis of Strategic Impacts for Industry in Indonesia’ at Hotel Des Indes, Central Jakarta, Thursday evening, 5 March 2026.
Tauhid argues that the government’s plan to achieve food self-sufficiency will take a long time if it is to cover all commodities. He says that dependence on imports, particularly for the soybeans used in the tempeh industry, shows that domestic production has not yet been able to replace the raw material’s needs.
He also highlights potential price volatility in foodstuffs amid global geopolitical dynamics. He said the tensions that have escalated after attacks involving Israel and the United States against Iran could affect the stability of commodity prices on international markets.
Tauhid explains that conflict impacts are usually felt more quickly in energy commodities. However, he reminded that rising prices for imported food also need to be anticipated by the government, especially for a country that remains dependent on foreign supply.
He warned that if the prices of imported commodities rise, Indonesia could face pressure on domestic food prices. This could occur with commodities such as soybeans and wheat, which are largely met through imports. He said the government should anticipate potential price hikes so as not to impose greater pressure on the domestic economy.
Director General of Plant Cultivation at the Ministry of Agriculture, Yudi Sastro, at the DPR complex on Tuesday, 20 January 2026, said the government will develop soybeans to achieve self-sufficiency gradually. The plan is to expand the soybean planting area by 73,000 hectares this year.
Expansion of the planting area will focus on production centres such as Central Java, East Java, and Lampung. Yudi said expansion of the planting area will continue next year.
In addition to expanding the planting area, the Ministry of Agriculture will promote the development of domestic soybean production through incentives such as seed aid, subsidised fertilisers, and farming tools and machinery.
Problems in soybean production include seed varieties. Yudi said currently soybean seed varieties can produce only 1–1.5 tonnes per hectare, while the demand for soybeans reaches up to 2.7 tonnes. Therefore, he said, superior varieties are needed to boost production.
Beyond seed issues, the area of cultivation determines production. The Ministry of Agriculture, he said, will expand soybean planting areas gradually.
Thus, domestic soybean production can meet demand, in other words Indonesia can gradually curb soybean imports. ‘Gradually and incrementally; we cannot stop imports all at once,’ he said.
Data from the Ministry of Agriculture shows Indonesia imports most of its soybeans from Brazil, the United States and Argentina. In 2023, the value of soybean imports from Brazil stood at US$1.99 billion, or 43.58 percent of total soybean imports.
Imports from Brazil and Argentina are mostly in processed form, including meal and other solid residues of soybeans as well as flour. Meanwhile, soybeans imported from the United States are mostly in fresh form.