Agricultural Commodities: Indonesia Highly Dependent on Soybean Imports
More than 60 percent of Indonesia's soybean consumption still needs to be imported from abroad. To reduce its dependence on soybean imports Indonesia's Agriculture Ministry aims to enhance domestic soybean production. For this reason soybeans have been included in the government's list of strategic food commodities (other examples are rice, sugar and corn), meaning these food items get special attention from the government. The Agriculture Ministry targets to see the production of 1.5 million tons of soybean in 2016, up from an expected 920,000 tons this year. Meanwhile, Indonesian soybean demand in 2015 is estimated to reach 2.3 million tons.
This year's expected production figure of 920,000 tons of soybeans is well below the original government target of 1.2 million tons. This causes major doubts whether the soybean production target of 1.5 million tons in 2016 is a realistic target.
The government prepares four steps to enhance domestic soybean production:
1. add up to nearly 400,000 hectares of soybean plantations to the existing 615,000 hectares. Most additional plantations will have to be developed outside the island of Java (which is characterized by exceptional fertility). As such, the government is looking for the right type of soybean that can grow in regions that have less fertile soil.
2. optimize soybean production by using new technology. Currently, many soybean plantations only have one harvest season, hence seriously curtailing annual soybean production. With new technology there could be up to three big harvests per year.
3. request state-controlled plantation companies to use their idle land for soybean production. One example is state-controlled firm Perhutani located in East Java. This company has up to 30,000 hectares of unused land.
4. use better seeds to improve soybean productivity per hectare from 1.20 - 1.56 ton currently to 1.7 - 2.0 ton per hectare.
Indonesia's Agriculture Ministry also said it will request the government to raise import tariffs for soybeans in order to limit imports.
Meanwhile, Chairman of the Indonesian Soybean Association (Akindo) Yu'san said government data regarding soybean production are inaccurate and need to be improved. Yu'san doubts that Indonesia will see a soybean production figure up to 900,000 tons in 2015.
Indonesian Soybean Production, Import & Plantation Size Statistics:
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015¹ | |
| Production (thousand tons) |
974.5 | 907.0 | 851.3 | 843.2 | 780.0 | 954.0 | 920.0 |
| Import (thousand tons) |
3,600.0 |
4,610.0 | 2,080.0 | 1,900.0 | 1,300.0 | 1,500.0 | 1,500.0 |
| Plantation Size (hectares) |
722,731 | 660,823 | 622,254 | 567,624 | 550,793 | 615,019 | 624,179 |
¹ indicates forecast
Source: Kontan