10 December 2018

PETANI Many oil palm farmers have been complaining this year that the price of fresh fruit bunches (FFB) has declined. The sustained fall in CPO prices has hit palm oil farmers in the upstream sector the hardest, especially smallholders (independent) who are not partnered with any palm oil company. At this time, harvesters and plantation maintenance workers have been reduced, and some have even stopped.

The purchase price of FFB at collectors in Indragiri Hulu, Riau, for example, over the past month has fallen to the level of Rp880 per kg. Some have even touched Rp600 per kg. Many farmers can only sell to collectors because palm oil mills (PKS) are still having difficulty absorbing new FFB. In fact, the cost of producing 1 kg of FFB has reached IDR 800-1,000.

Not only at the farm level, the decline in CPO prices can also have an impact on layoffs in the industry. Conditions in several existing palm oil mills are already at a dangerous level if there are no buyers and price improvements. “Indonesia's CPO production is still very dependent on foreign conditions. As much as 80 percent of Indonesia's CPO production is exported to India, China and Europe,” said President Director of PT Mahkota Group, Usli Sarsi.

Indonesia's dependence on foreign countries causes prices to fluctuate. When the global economy declines, CPO prices fall. Indonesia's heavy dependence on foreign CPO, according to him, must be minimized. It is time for the government to absorb more domestic use of CPO. In addition to making CPO derivatives such as edible oil and others, it should also implement biodiesel.

“The more domestic use of CPO, the more stable CPO prices will be,” Usli said. The government's desire to implement biodiesel above 20 percent is the right step to absorb more CPO.

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Obstacles

ConstraintsLimited production capacity at the PKS causes farmers' FFB harvests not to be processed optimally. As a result, farmers suffer losses. The government needs to record the amount of PKS production capacity with FFB yields.

So far what has happened is that the production capacity of PKS is uneven. In some provinces, PKS production capacity is greater than the yield of FFB produced. In other areas the opposite occurs. In North Sumatra, PKS production capacity is greater than the yield of FFB. “PKS should exceed production results, so that in the peak season it can produce more maximum CPO,” said Usli.

In addition to limited production, PKS also has limited stockpile tanks. In general, PKS has a stockpile tank of 40 thousand tons. In the peak harvest season, the tank is unable to accommodate.

Another limitation is the stockpile tanks at the port. “The stockpile tanks at the port should be increased so that it will speed up the loading into the ship,” he said.

Inadequate road infrastructure is also an obstacle. As a result, the delivery of FFB to the PKS is late, as well as the delivery of CPO to the port.

Usli sees that the government is quite serious in overcoming the decline in CPO prices. “The CPO process must be seen from upstream to downstream. If one of them experiences problems, it will have an overall impact.”

In addition, it is time for more absorption of CPO into the country so that dependence on foreign countries is not so great. “If more CPO products are absorbed domestically, Indonesia's economic growth will be much stronger,” said Usli.

Unfortunately, central government policies are not followed by local governments. Local governments sometimes make the wrong policies because they do not understand palm oil issues. The local government wants to help farmers by forcing PKS to buy FFB above IDR 1,000 per kg. But with the condition of CPO prices falling, of course PKS does not dare. As a result, many farmers' FFBs are rotten because no one wants to buy them. (fahrin malau)

Source : http://harian.analisadaily.com/jentera/news/perbanyak-penggunaan-cpo-di-dalam-negeri/661033/2018/12/09