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Govt to increase DMO again for palm oil producers
CPO producers will only be allowed to export four times as much as they sell in the domestic market, rather than six times as much.
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People shop for cooking oil made from palm fruit at a supermarket in Jakarta on March 27, 2022. (Reuters/Willy Kurniawan)
C
rude palm oil (CPO) producers will be required to supply more of their output to the domestic market next month, if they want to maintain their export volumes.
The Trade Ministry said on Thursday that the ratio between output sold at home under the domestic market obligation (DMO) and that shipped overseas would change to 1:4 from the previous 1:6, meaning CPO producers will only be allowed to export four times as much as they sell in the domestic market, rather than six times as much.
This marks the second cut to the share available for the global market this year, as the ratio was 1:9 for February.
“Why were the export rights cut? It’s not that we want to restrict exports, but we want to sustain the DMO policy, so as to maintain our domestic supplies,” the Trade Ministry's Policy Agency head, Kasan Muhri, told reporters on Thursday.
Read also: Indonesia seeks to set its own CPO benchmark price by this year-end
Also on Thursday, the ministry cut its target for the nationwide cooking oil DMO to 300,000 tonnes per month from 450,000 tonnes.
That is the same figure that had been in effect in January, before it was hiked to ensure sufficient domestic supplies of subsidized cooking oil under the Minyak Kita program over Ramadan and the Idul Fitri holiday.
