Rising Imported Soybean Prices Squeeze Tempeh and Tofu MSMEs, IPB University Expert Offers Solutions
The recent increase in imported soybean prices highlights how global economic fluctuations can directly affect households and micro, small, and medium enterprises (MSMEs) in Indonesia.
Dr Tanti Novianti, a lecturer at the School of Business, IPB University, explained that Indonesia’s heavy reliance on imported soybeans has made the country’s tofu and tempeh industries highly vulnerable to fluctuations in the rupiah exchange rate and developments in the global market.
“Tempeh and tofu are staple sources of protein for many Indonesians, yet around 90 to 95 percent of the soybeans used to produce them are still imported. When the US dollar strengthens or the rupiah weakens, imported soybeans automatically become more expensive in rupiah terms, even if global soybean prices remain relatively stable,” she said.
She explained that this situation directly increases production costs for tofu and tempeh producers. At the same time, their ability to raise selling prices is very limited because consumers come from various socioeconomic backgrounds and are highly sensitive to price increases.
As a result, producers often face difficult choices, raising prices and risking the loss of customers, maintaining current prices by reducing product size or accepting lower profit margins, or cutting production, which could affect workers’ incomes and the sustainability of their businesses.
“The depreciation of the rupiah has caused production costs to rise faster than MSMEs can adjust their selling prices. This is why many producers feel increasingly squeezed,” she said.
Dr Tanti believes that Indonesia’s heavy dependence on imported soybeans remains the core issue. Domestic soybean production is still far below national demand, which currently stands at approximately 2,5 to 2,7 million tons per year. In addition, the productivity of locally grown soybeans remains relatively low compared to that of major soybean producing countries.
Opportunities Ahead
Despite these challenges, she believes there is significant potential to strengthen domestic soybean production. Indonesia has ample agricultural land, a large domestic market, and opportunities to develop superior soybean varieties that meet the needs of the tofu and tempeh industry.
“Farmers need clear economic incentives. It is not enough to simply encourage them to grow soybeans. They also need price certainty, reliable markets, quality seeds, technology, and continuous assistance,” she explained.
In the short term, she urged the government to strengthen soybean price stabilization measures, improve distribution oversight, and expand access to affordable financing for MSMEs through schemes such as the People’s Business Credit (KUR) program.
In the long term, increasing local soybean production, strengthening producer cooperatives, advancing research on superior soybean varieties, and modernizing the tofu and tempeh industry are strategic measures to reduce Indonesia’s dependence on imports.
“Food security is not only about rice, but also about affordable sources of protein such as tempeh and tofu. Therefore, policies that protect producers while strengthening local soybean production must continue to be promoted to ensure business sustainability and keep food affordable for the public,” she concluded. (AS)(IAAS/PRP)
