17 May 2022

The export ban on Crude Palm Oil (CPO) and cooking oil has brought multiple negative impacts, not only to palm oil business players but also to the 3 million oil palm farmers in Indonesia.

In addition, Indonesia's macroeconomic performance is jeopardized due to a decline in foreign exchange exports, which could be a factor that depresses the rupiah exchange rate against the US dollar.

This was conveyed by the Deputy Chairman of the Indonesian Employers Association (Apindo) of North Sumatra in the field of plantations and agriculture, Usli Sarsi, who asked that the CPO export tap be reopened as soon as possible.

“We ask the government to decide this so that it does not have a domino effect,” he said via cellular phone, Monday (16/5).

The ban on CPO exports, said Usli, who is also the North Director of PT Mahkota Group, has harmed the palm oil industry, from farmers to entrepreneurs.

“The excess supply of palm oil that has been absorbed in the export market cannot possibly be absorbed in the domestic market. Lift the ban immediately,” he said.

One of the real impacts of the export ban policy is the decline in the price of fresh fruit bunches (FFB) of oil palm farmers. The low absorption of CPO due to the export ban has depressed FFB prices.

Not many industries have palm oil plantations. They (the palm oil industry takes materials from palm oil farmers). Similarly, not many palm oil industries have stockpiles to store CPO.

Please note that Fresh Fruit Bunches (FFB) which are processed into CPO cannot be stored for too long. CPO storage should not exceed 2 months because if it is stored for too long, the acid content will increase and the quality of CPO will decrease.

The longer the government's ban on CPO exports, the greater the losses suffered by the palm oil industry. Indonesia has around 1000 large and small palm oil industries. If calculated, the losses of the palm oil industry in Indonesia could reach trillions of rupiah.

“We support the government's efforts to reduce the price of cooking oil for the community. But what needs to be questioned is who subsidizes cooking oil,” he asked.

The most appropriate subsidies are given to the lower middle class. Currently, many prices of basic necessities have increased, such as sugar and others. But why is the cooking oil that is given a label not supported. This is not right, let alone to accuse the cooking oil business of a lot of mafia. If it is said that there are rogue entrepreneurs, it is true and if it is said that there are distributors who take advantage of this opportunity, it is also true. But it must be sorted out, there are still many palm oil entrepreneurs who have a nationalist spirit, both paying taxes correctly, exporting CPO and contributing to the country's foreign exchange, that must be explained and do not give the public misleading information, including the media in providing information to an educated public.

Source : https://medan.tribunnews.com/2022/05/17/larangan-ekspor-cpo-minta-segera-dicabut