USLI SARSI : INDONESIA BECOMING A GLOBAL CPO PRICE REFERENCE CAN INCREASE TRUST AND BIG PLAYERS
06 March 2023
The government and business players have agreed to build a reference for crude palm oil (CPO) prices in the global market through the development of a credible and transparent commodity exchange in the country.
Deputy Chairman of the North Sumatra Indonesian Entrepreneurs Association (APINDOSU) for Plantations and Agriculture, Usli Sarsi said that as the world's largest producer, Indonesia should be able to become a reference for world (Global) CPO prices. So far, said Usli, who is also the President Director of PT Mahkota Group Tbk, Indonesia still uses CPO price references from the Malaysian Exchange (MDEX) and the Rotterdam Exchange in the Netherlands. By using foreign exchanges, it sometimes has an impact on the balance of supply and demand in the country.
CPO prices in the country are often manipulated, this is because Indonesia, there is no commodity exchange that is able to drive three functions namely “price discovery” (price formation), “price reference” (price reference) and “hedging” (hedging). With Indonesia becoming the world CPO price reference (Global), there are many benefits obtained, one of which is the dependence on other countries as the determinant of global CPO prices will certainly be reduced.
“We must stand in line with commodity-producing countries that can determine world CPO prices. This will increase trust and become a big player in the palm oil commodity, he said.”
According to Usli, the government must protect palm oil prices so as not to harm farmers. Palm oil is the future of Indonesia. Many countries do not want palm oil plantations in Indonesia to develop, this can be seen from the efforts of sunflower-producing countries, soybeans linking palm oil to environmental damage. Whereas the palm oil industry from upstream to downstream is environmentally friendly. All palm trees can be used, as well as palm oil waste can be turned into fertilizer and energy.