January 21, 2008

Indonesian government mulls on regulating soy prices

The Indonesian government ponders on fixing soy prices to cushion the price increases, an agriculture ministry official said Thursday.

Baran Wirawan, a food crop expert, said that the government had not decided on the exact price, but it could be between INR5,500 (US$0.58) to INR6,000 (US$64) a kilogramme.

US soy futures have rallied in the past weeks, with the July soy contract on Chicago Board of Trade at an all-time high of US$13.76 a bushel on Monday.

Indonesia's food industry has been heavily affected by the soaring soy prices as the country still imports 70 percent of its soy requirements.

Escalating global soy prices have pushed local prices to around IRN7,500 (US$0.79) a kilogramme, up from 3,450 (US$0.37) a kilo in early January.

Wirawan said the government will allow importers to adjust their import costs and selling price oncethe new plan is implemented.

The government is also looking on assigning state procurement agency Bulog to import soy.

Indonesia's current soy stocks are around 250,000 tonnes, enough for two months of consumption, Wirawan pointed.

The country imported around 80-90 percent of its total 2007 soybean imports of around 1.4 million tonnes from the US, according to data from the Indonesian office of the American Soybean Association. The remainder came from Argentina.