Indonesia to allocate $28 mln for soybean subsidies amid rising import costs

The Indonesian government is preparing to launch a soybean subsidy program aimed at stabilizing domestic prices and supporting food processors. The first phase of the initiative will be funded with 500 billion rupiah (approximately US$28 million).

The plan was announced by Coordinating Food Minister Zulkifli Hasan, who said the measure is necessary due to rising soybean import costs driven by the depreciation of the rupiah and higher global energy prices. Indonesia remains heavily dependent on imported soybeans to meet domestic demand.

Under the initial phase, the subsidy will cover 250,000 tonnes of soybeans. Food processors will receive financial support of 2,000 rupiah per kilogram of soybeans purchased. The program is expected to help maintain price stability and support producers of soy-based foods such as tofu and tempeh.

Additional pressure on the market has come from the weakening Indonesian currency. Last week, the rupiah fell beyond the psychological threshold of 18,000 per U.S. dollar, compared with around 16,500 per dollar at the beginning of the year.

The government expects the subsidy scheme to reduce the impact of currency fluctuations on food prices and ensure stable operations for businesses that rely on soybeans as a key raw material. The measure is also intended to protect consumers from further increases in the cost of staple food products.

Tags: imports, subsidies, Indonesia, soybean