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Govt approves 1 million tons of CPO for export
An association representing smallholder farmers said it had not seen a significant rise in FFB prices since the ban was lifted on May 23.
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Palm oil farmers protest on May 17, 2022 outside the Office of the Coordinating Economic Affairs Minister in Jakarta to demand an end to the government ban on palm oil exports. The export ban went into force on April 28 and was lifted on May 23. (Reuters/Willy Kurniawan)
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wo weeks since lifting its ban on palm oil exports, the government has approved shipments of more than 1 million tons of crude palm oil (CPO) and derivative products, expressing hope that the move would lift fresh fruit bunch (FFB) prices for smallholder farmers.
The export volume was calculated based on the 1:3 ratio for the commodity’s amount required under the domestic market obligation (DMO) and that permitted for exporting under the new People’s Bulk Cooking Oil program.
However, only around one-third of the shipments approved for export had left Indonesia by Sunday because producers were facing logistical as well as other issues.
“Starting these exports is important, as it will impact the revenue of smallholders. If exports rise, then all distribution chains can move again and fresh fruit bunch prices for smallholders will rise,” Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan told a virtual press briefing on Sunday.
Read also: RI to scrap subsidy for bulk cooking oil
Luhut added that resuming exports would not deprive the country’s supply of bulk cooking oil, as the government had secured a sufficient amount to flood the domestic market and keep the price stable at Rp 14,000 per liter.
At the same time, resuming CPO exports would greatly help smallholders, he said, with the government aiming to raise FFB prices for smallholders to at least Rp 2,500 per kilogram.
