The government has scrapped the 10 percent import duty on soybeans to help curb the rising price of the commodity in the local market.
"The decision, effective Monday, is part of the government's short-term policy to overcome the surging soybean prices," said the deputy minister for agriculture and fishery at the office of Coordinating Minister for the Economy Bayu Krisna Murthi.
The elimination of the import duty is part of the government's efforts to curb the sharp increase in the soybean prices, which have caused resentment among tempeh and tofu makers, who use soybean as their main raw material.
The global price of soybeans reached its highest point in the last 34 years, US$13,1052 per bushel, on Dec. 28, because of the strong demand from China and India. In Indonesia, the price of imported soybeans almost doubled to $600 per ton last week, from $351 in January last year.
Bayu said the government's short-term plan included cost control of trade and production of the commodity, market operations and direct support to people who had suffered losses because of the rise in prices.
For the long-term, the government will encourage farmers to increase the production of soybeans by developing infrastructure to reduce transportation costs as well as re-balancing the market structure of the commodity.
Last year, Bayu said, the country imported 983,000 tons of soybeans, while local farmers produced 608,000 tons. In 2006, it imported 1.13 million tons and produced 748,000 tons.
This year, the government projected that local farmers would yield between 800,000 tons and 900,000 tons of soybeans to fulfill the country's 2-million-ton need.
Despite these efforts, Bayu predicted the price of the commodity -- as well as others, such as rice and wheat -- would remain volatile for the next six months because of high demand on the international market.
"The government will continue to oversee the impact of the price volatility, especially on people's purchasing power, SMEs and inflation," he said.
The main driver of the country's inflation last year was staple foodstuffs, which accounted for 2.82 percent of the total inflation rate of 6.59 percent.
He said staple foodstuffs that were prone to inflation were rice, sugar, cooking oil, corn, soybean, meat, milk, flour and spices such as chili and red onion.
Bayu also said the government was considering ordering the State Logistics Agency (Bulog) to oversee the import of soybeans and other commodities.
"However, Bulog needs to learn about soybean imports first as it last imported the commodity between 1996 and 1997," he said. (adt)
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