01/23/2008, 00.00
INDONESIA
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Jakarta seeks solutions to the "soy crisis"

The record spike in the price of soy on the national markets is bringing small and medium-scale producers to the point of collapse. Indonesia, where soy is a staple food for many families, imports two thirds of its supply. Jakarta is cutting tariffs and providing 127 million dollars to reach self-sufficiency in three years.

Jakarta (AsiaNews) - In Jakarta, there is no end in sight to the soy crisis, "at least for the next six months". Indonesia's deputy minister for agriculture and fishery, Bayu Krisna Murthi, made this comment yesterday in regard to the serious situation across the sector that is leading to the collapse of many producers. The basis of foods like tofu and tempeh - central to Asian diets - soy has recently reached exorbitant prices. Among the main factors are increasing demand on the part of India and China, and less supply on the international markets, because the United States is replacing much of its soy crop with maize that is destined for biofuel production.

Prices have more than doubled in the Indonesian archipelago, from 3,000 rupees per kilogramme in January 2007 to 7,400 rupees per kilogramme. Many companies have been forced to shut down recently because they are unable to maintain their profit margins. Last week, the closure of small and medium-scale producers picked up significantly. For days, tofu and tempeh - foods accessible for all until recently - have disappeared from supermarket shelves.

To confront the crisis, the government has studied medium and long-term measures: since January 21, a temporary 10 percent cut in import tariffs has been in effect, and the goal of self-sufficiency by 2011 has been established. To meet this goal, Jakarta has allocated 127 million dollars for farmers, to be invested in irrigation and planting facilities.

According to official data, two thirds of the country's soy comes from imports. So within the next three years, Indonesia will have to increase production from 600 thousand to the 2 million tonnes per year needed to meet the country's needs.

The international price for a bushel of soybeans reached an all-time record of .10 at the end of last December. The price increase - the sharpest in the last 34 years - amounted to about 90 percent since January of 2007.

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