Institute for Research on Economics and Society – Faculty of Economics and Business – University of Indonesia

ECONOMIC ANALYSIS SERIES: TRADE AND INDUSTRY BRIEF, January 2021

January 18, 2021

The increase in soybean prices due to disruption of the logistics system during the COVID-19 pandemic has had a significant impact on the availability of soybeans in Indonesia. With consumption reaching 3-3,5 million tons per year and domestic production levels of only 950 thousand tons per year, Indonesia is very dependent on soybean imports. This soybean shortage in turn has an impact on the tofu-tempeh industry. This January 2021 Trade and Industry Brief discusses export and import trends as well as the condition of the soybean supply chain in Indonesia. In general, the performance and productivity of soybeans in Indonesia is very low due to low incentives for farmers to plant soybeans. The low productivity of farmers also indicates the failure of soybean self-sufficiency which was launched by the government six years ago. There are several things that can be done in the short and long term. In the short term, the government can ensure the availability of soybeans by building a stock monitoring system in traders' warehouses and identifying the capabilities of local farmers. In the long term, efforts can be directed at producing high-quality soybeans, using superior seed varieties, and improving the entire production chain to create economic incentives for farmers.

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