January 5, 2012

Indonesian soy prices up due to import tax

The addition of 5% import duty on soy grains has increased its price on the Indonesian market, said producers.

The price of soy which was previously exempted from import duty, climbed to IDR6,000 (US$0.66) per kilogram from IDR5,600 (US$0.61) last month even before the import duty began to be effective only on January 2012.

Sutaryo, the chairman of the association of soy cake producing cooperatives, said the price of the food grain is expected to continue to rise through this year.

Supplies are falling short of demands with production could not keep pace with growing consumption, Sutaryo said.

Domestic production averaged only 550,000 tonnes as against consumption of 2.4 million tonnes a year, he said.

In addition, demand for soy is growing in international market especially from China, he said.

With requirement of 34 million tonnes a year China could absorb all supplies of that commodity from Brazil and Argentina, he added.