Luhut Urges Trade Ministry to Expedite CPO Exports
3 July 2022 14:54 WIB
TEMPO.CO, Jakarta - Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan urged the Trade Ministry to accelerate the export of crude palm oil (CPO) and cooking oil raw material to increase the price of fresh fruit bunches.
To expedite the export of CPO and cooking oil raw material, the Trade Ministry can raise its multiplier ratio to seven times as much as the domestic market obligation (DMO) - a rule that requires CPO producers to sell a quarter of their production to local companies.
"I ask the Trade Ministry to raise the export multiplier to seven times, as of July 1, with the ultimate goal of raising significantly the price of fresh fruit bunches at the farmer's level," Pandjaitain stated at a meeting held to evaluate the cooking oil control policy on Friday, as quoted from a written statement on Saturday.
Earlier, the government had offered producers with export quota incentives five times as much as the realized distribution of DMO and domestic price obligation (DPO). For instance, if a producer can sell one thousand tons of bulk cooking oil at Rp14,000 per liter, then it will deserve to export five thousand tons.
Pandjaitan affirmed that the government is seeking to strike a balance between the upstream and downstream target in controlling the price of cooking oil.
"Right now, the cooking oil price has reached Rp14,000 per liter in Java and Bali. Hence, we can start relaxing the upstream policy cautiously to expedite export and increase the price of fresh fruit bunches at the farmer's level," he stated.
In June 2022, the government allowed the export of 3.41 million tons through the transition and acceleration program to provide certainty to producers to export CPO. The transition program can be applied for several months ahead.
By the end of June 2022, the volume of bulk cooking oil distributed as part of the cooking oil producers' DMO had reached over 270,000 tons.
The government will also take steps to expedite the export of CPO and cooking oil raw material, as the existing tanks will reach full capacity soon.
The other effort to increase the CPO price in the second semester of 2022 is raising the CPO content in biodiesel, from 30 percent (B30) to 35/40 percent (B35/B40), and the policy will be applied in a flexible way depending on the CPO supply and price, he explained.
He urged the Energy and Mineral Resources Ministry, the Oil Palm Plantation Fund Management Board (BPDPKS), and state-owned oil and gas firm Pertamina to assess the plan soon.
"I hope that all relevant ministries and institutions can soon follow up on the plan, so that the cooking oil price can be controlled soon and benefit consumers, farmers, and producers," he remarked.
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