Iconic street food gets downsized as rupiah slumps
Tempeh is mainly produced from US soybeans
JAKARTA: The rupiah’s slump is hitting one of Indonesia’s most popular snacks as it drives up the cost of importing soybeans.
The rupiah’s 10% drop this year to the lowest in two decades makes it the second-worst performing currency in Asia and is raising the cost of making tempeh, a fermented soybean product that’s a cheap source of protein.
Makers like Rasako, who oversees 30 families of tempeh makers in central Jakarta, are now reducing the size of their product to ease costs because raising the price risks losing customers.
“The situation really gives us headache,” said Rasako, a 50-year-old father of four who only uses one name.
“We wanted to scream, but that’s useless. So we just do whatever we can do, because we rely on imported soybeans as the quality of the local produce is not that good.”
The rupiah weakened past 15,000 per US dollar for the first time in 20 years as sentiment toward emerging-nation assets soured and oil prices jumped.
South-East Asia’s biggest economy has been rattled by an emerging market rout that sent its currency tumbling to the lowest since the 1997-1998 Asian financial crisis.
The government has taken steps to curb imports and rein in a current account deficit, while Indonesia’s central bank has raised interest rates five times since May and drained foreign reserves.
Tempeh is sensitive to currency fluctuations as it’s mainly produced from US soybeans, which account for more than 90% of imports.
Rasako and his group of tempeh makers buy 50 kg of soybeans per day from wholesalers. US soybean prices in Jakarta rose 27% in the past two months to 8,500 rupiah (57 US cents) per kg, he said.
That’s despite weaker soybean futures on the Chicago Board of Trade since early July when China imposed an additional 25% tariff on imports of US soy in an escalating trade spat between the two countries. Futures have rebounded about 5% since dropping to the lowest since 2008 on Sept 18.
The price of plastic, used to wrap soybeans during fermentation to make tempeh, climbed 20% to 30,000 rupiah per kg, according to Rasako.
To deal with rising costs, tempeh makers are reducing the size of cakes to 17 cm in length from 20 cm, Rasako said in an interview in a cramped Jakarta alley. The food sells for 6,000 rupiah a piece, he said.
The problems attracted the attention of vice-president candidate Sandiaga Uno, who has compared the shrinking size of tempeh to the dimensions of an ATM card. On Sept 19, Trade Minister Enggartiasto Lukita posted on Twitter that soybean prices weren’t rising and the size and price of tempeh and tofu are stable.
Tempeh and tofu makers could buy soy directly from importers to cut costs as prices at warehouses are stable at about 7,100 rupiah per kg, said Yus’an, executive director of the Indonesian Soybean Association.
Distributors’ prices are higher as they have to cover transportation and reprocessing costs to increase the grades, he said.