Palm Oil Frukt Bunches (FFB) Prices Continue to Plummet, Farmers Propose Building Palm Oil Mills

The Chairman of Apkasindo said that the handover was carried out by representatives of Apkasindo from 22 provinces to the Plantation Directorate of the Ministry of Agriculture on Monday (July 4, 2022). According to him, the submission of the document was a result of the drastic drop in the price of fresh fruit bunches (FFB) of palm oil over the past few months. `Therefore, palm oil farmers must immediately enter the downstream sector by establishing PKS and Palm Oil Cooking Oil [MGS] and Red Cooking Oil [M3] Plants,` said Gulat, Tuesday (July 5, 2022).Gulat said the three PKS units are in West Papua Province, namely in Manokwari Regency, in Singkawang City, West Kalimantan, and Banten Province.`Furthermore, the initial proposal for the establishment of the Farmers' PKS was 10 units, but only 3 units have been approved by BPDPKS (Palm Oil Plantation Fund Management Agency),` he said. At the meeting, Gulat said that the current FFB problem is very complex and convoluted. All the problems that currently occur started with the scarcity and high price of cooking oil, however, as a result, palm oil farmers are the ones that are most disadvantaged.According to him, the price of farmers' FFB has been at its lowest point in the past 3 months, namely Rp1,250-1500/kg. This is inseparable from the low results of the crude palm oil (CPO) tender at PT. Kharisma Pemasaran Bersama Nusantara (KPBN) which on Monday (July 4, 2022) was at Rp7,775/kg.In fact, the CPO price in Rotterdam is US$1,480/ton or Rp22,200/kg and in Malaysia RM 4,555/ton or Rp15,500/kg. He believes that the low price of Indonesian CPO is due to the implementation of domestic market obligation (DMO), domestic price obligation (DPO), Flush Out (FO), Export Duty (BK), and Export Levy (PE). `As a result, the price of Indonesian CPO is depressed by 65 percent from the Rotterdam price. The mathematics is that the lower the KPBN CPO tender price, the more the price of FFB falls for Farmers,` explained Gulat.Meanwhile, the Director of Primary Necessities and Important Goods at the Ministry of Trade, Isy Karim, revealed that the DMO and DPO policies are to secure the supply of cooking oil within the country. `If the DMO is released wildly, the [cooking oil] price will go up again, let the price drop, the DMO will remain in place,` said Isy when met at the Ciracas Market, East Jakarta, Tuesday (July 5, 2022).
Source: https://ekonomi.bisnis.com/read/20220705/12/1551413/harga-tbs-sawit-anjlok-terus-petani-usul-bangun-pabrik-kelapa-sawit