May 3, 2024

 

Indonesia seeks alternative soybean suppliers amid price concerns

As the world's second-largest consumer of soybeans, Indonesia is exploring alternative sources of soybean suppliers to ensure stability in domestic supply and prices, Voice of Indonesia reported.

 

According to Nisrina Nafisah, a researcher at the Centre for Indonesian Policy Studies (CIPS), Indonesia could increase imports from Brazil and Argentina to diversify its soybean sourcing countries. This move aims to mitigate the impact of price fluctuations and maintain stability in domestic soybean markets.

 

Nafisah emphasised the importance of diversifying import sources to stabilise prices and ensure an adequate supply of soybeans, especially considering Indonesia's significant soybean consumption, ranking second globally after China.

 

Soybean production in Brazil and Argentina stands at 140 million tonnes and 50 million tonnes annually, respectively. However, Indonesian imports from these countries currently account for less than one percent of its total soybean imports each year, with no imports from either country recorded in 2020.

 

This presents an opportunity for enhanced cooperation, particularly in addressing Indonesia's reliance on soybeans from the US.

 

Nafisah highlighted ongoing efforts to strengthen economic ties with Latin American and Caribbean nations, which represent non-traditional markets for Indonesia. Such cooperation could potentially allow Indonesia to share its soybean import quota with countries like Brazil and Argentina.

 

Over 80% of Indonesia's soybeans are imported annually, with the US accounting for around 90% of imports in 2020, totalling 2.238.5 tonnes out of 2.475.3 tonnes.

 

Canada stands as the second-largest source of soybean imports for Indonesia, supplying 229.6 thousand tonnes in 2020.

 

Factors contributing to the recent surge in soybean prices on the international market include reduced global soybean supply due to weather-related disruptions in major producing countries like the US, Brazil, and Argentina.

 

Despite declines in production since December 2021, Brazil and Argentina remain key players in global soybean production, collectively contributing about 80% of the world's soybean output.

-      Voice of Indonesia