Jakarta, ThedailyID — Indonesia’s weakening rupiah has begun to pressure small businesses, with tempeh traders among those feeling the impact of rising import costs.
Purbaya Yudhi Sadewa said the currency’s depreciation has reduced profit margins for tempeh sellers because Indonesia still relies heavily on imported soybeans.
As the rupiah loses value against the US dollar, importers must pay more for soybean shipments. The higher costs eventually flow through the supply chain and affect producers and retailers.
Purbaya said many tempeh sellers now face a difficult choice. They can either raise prices and risk losing customers or absorb the additional costs and accept lower profits.
The situation highlights the broader effects of exchange-rate volatility on everyday economic activity. While large corporations often have tools to manage currency risks, small businesses usually have fewer options.
Indonesia imports a significant portion of its soybean supply each year, mainly from the United States. As a result, fluctuations in the rupiah can quickly influence production costs for tempeh and tofu makers.
Moreover, soybean-based foods remain staple products for many Indonesian households. Any increase in prices could affect consumer spending, particularly among lower-income families.
The rupiah has faced pressure in recent months amid global economic uncertainty and shifting investor sentiment. Market participants have also monitored developments in the United States, including interest rate expectations and economic data.
Purbaya emphasized that maintaining currency stability remains important because exchange-rate movements directly affect businesses that depend on imported raw materials.
Economists have long warned that a weaker rupiah can raise costs for industries that rely on foreign inputs. Food producers, manufacturers, and retailers often feel the effects first.
For tempeh traders, the challenge is especially significant because profit margins tend to be relatively thin. Even modest increases in soybean prices can reduce earnings and complicate daily operations.
Despite the pressure, industry players continue to hope for a more stable currency environment. A stronger rupiah could help ease import costs and provide relief for businesses across the supply chain.
