Rupiah Hits 18,000, Tofu Makers in Cianjur Go Out of Business

The weakening of the rupiah against the US dollar, now touching Rp18,000 as of Thursday (4/6), has dealt a severe blow to the small and medium industrial sector in the regions. In Cianjur Regency, West Java, a number of tofu producers have been forced to completely halt production due to an uncontrollable surge in the price of imported soybeans. This distressing situation is visible in Langensari Village, Karangtengah District, where a tofu factory has chosen to temporarily close its business because operational costs have swelled drastically, far outweighing thinning profit margins. “Production costs have ballooned, especially because the price of imported soybeans and cooking oil keeps rising. There’s no point producing when the profit is razor-thin,” said Taufik Munandar, a tofu maker in Cianjur, on Thursday (4/6). The halt in tofu production has directly impacted workers’ livelihoods. Taufik admitted he was forced to send home 15 of his employees as the factory ceased operations. Under normal conditions, he was able to process up to 1.5 quintals, or 150 kilograms, of soybeans daily for distribution to various regions in the form of fresh or fried tofu. “It is very tough for us small business owners. I had to lay off 15 workers. It’s a pity; they have no income now,” he lamented. He expressed hope that the government would swiftly intervene with tangible assistance, such as subsidies for soybean and cooking oil prices, to save people’s businesses. The Cianjur Regency Office of Cooperatives, SMEs, Trade and Industry confirmed that the price of imported soybeans has climbed significantly over the past two weeks. The Head of Trade at the office, Ivan Feriadi Rahman, stated that soybean prices are now holding at Rp16,000 per kilogram. “Imported soybean prices have indeed risen significantly. This is one of the impacts of the weakening rupiah against the US dollar. The increase has been observed occurring gradually over the past fortnight,” Ivan explained on Wednesday (3/6). Local producers’ dependence on imported soybeans makes the stability of tofu and tempe production highly vulnerable to rupiah exchange rate fluctuations. Should the rupiah’s weakening trend persist, there are fears that more producers will follow suit and permanently close their businesses.