DMO Policy on Palm Oil Adjusted; Producers Must Supply 300,000 Tons of Cooking Oil
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27 April 2023 21:10 WIB
TEMPO.CO, Jakarta - The government decided to change the domestic market obligation (DMO) policy for people's bulk cooking oil (MGCR). The Trade Ministry’s Head of Trade Policy Agency, Kasan, said the new rule obliges producers to supply the government’s cooking oil brand Minyakita and bulk cooking oil at 300,000 tons per month from previously 450,000 tons.
“This policy is in accordance with the results of the coordination meeting on the cooking oil policy evaluation held on April 18,” said Kasan in a press conference at the Trade Ministry office, Central Jakarta, on Thursday, April 27.
He revealed that the meeting was chaired by Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. The basic diverter ratio for official export activities was reduced from 1:6 to 1:4. This means that if a producer supplies 300,000 tons for domestic markets, it will be allowed to export 1.2 million tons.
The current DMO policy, said Kasan, was made in consideration of the installed capacity in line with the Domestic Trade Director General’s Decree No. 82 of 2022. According to Kasan, the change in palm oil DMO policy could maintain the stability of demand for domestic cooking oil which has soared after Ramadan and Eid al-Fitr 2023.
On the other hand, he hoped that the DMO on palm oil could be divided into 70 percent for Minyakita and 30 percent for bulk cooking oil in order to overcome the shortage of Minyakita.
A number of regions recently reported a shortage of Minyakita and bulk cooking oil. Besides, the Business Competition Supervisory Commission (KPPU) revealed the price of subsidized cooking oil soared far above the highest retail price (HET) of Rp14,000 per liter.
According to KPPU, this is because the production of Minyakita is only 24 percent of the determined supply. The Trade Ministry thus stated that it would keep monitoring changes in this DMO policy.
Kasan also warned all business actors, distributors, and retailers to comply with this rule starting May 1, 2023. If violations are found, the Trade Ministry will coordinate with the National Police’s Food Task Force to take legal action.
RIANI SANUSI PUTRI
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