Article by Viory
Import Costs Rise
A sharp rise in soybean prices is squeezing Indonesia’s tofu and tempeh producers, forcing many small businesses to cut product sizes, reduce output and scale back operations as the weakening rupiah drives up import costs.
Footage shows workers at a tofu factory in Sawangan, West Java, grinding soybeans, processing curds and shaping blocks of tofu ready for distribution to local markets.
Indonesia relies heavily on imported soybeans for tofu and tempeh production, leaving manufacturers exposed to currency fluctuations and global commodity price movements. As the US dollar strengthens against the rupiah, the cost of imported soybeans has climbed, eroding already thin profit margins.
Producers Feel Pressure
“To be honest, the spike in soybean prices has had a massive impact. Prices have gone up by nearly 30 percent. Since Ramadan, the price has surged from 8,500 IDR ($0.47) per kg to 11,200 IDR ($0.62) today,” said factory owner Nasirin.
“This situation puts me, as a tofu factory owner, in a real dilemma. If we make the tofu pieces smaller, customers complain. But if we stick to our standard size, we lose money. I just want the government to step in and handle this situation.”
Government Response Measures
The government has responded with emergency measures aimed at stabilising supplies of the staple protein products. The Ministry for Food Affairs authorised a Rp 2,000 subsidy per kilogram of soybeans through the state logistics agency, Bulog, and set a price ceiling of Rp 11,500 per kilogram. Authorities have also warned importers against artificially inflating prices.
But Nasirin warned that it’s not enough, and says prolonged economic pressure on small businesses could have wider social consequences.
Warning Of Unrest
“If things continue like this and the government ignores the issue, it’s not impossible that riots akin to the 1998 crisis in Indonesia could happen again. I appeal to the government to pay attention to this situation and take immediate action. I am only an elementary school graduate, yet I employ 40 to 50 people. If soybean prices keep rising and I am forced to shut down my business, what will happen to my employees?” he said.
The May 1998 riots in Indonesia were a violent, pivotal turning point triggered by economic collapse and hyperinflation, leading to widespread unrest and the eventual fall of President Suharto.
Article by Viory
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