Palm Oil, Cocoa Exporters See Fortune in Strengthening US Dollar

Andi Nuhung, Executive Director of Indonesian Palm Oil Board (DMSI) said, in the last few days, the price of Fresh Fruit Bunch (FFB) at farmer level has been boosted to Rp 2,000 per kilogram (kg) from the previous range of Rp 1,500-Rp 1,700 per kg. According to him, the price increase was contributed by the weakening rupiah against the US dollar.

`The price in the world market is in the range of US$ 600-US$ 750 per ton. However, because of the strengthening dollar, once converted to rupiah, farmers and exporters will receive a higher price. With that, farmers should receive more rupiah with this strengthening,` Iskandar told KONTAN, Wednesday (4/10).

According to Iskandar, with the price increase at the farmer level, it will also positively impact the production of palm oil. The reason is, with the price increase, farmers will be encouraged to perform better maintenance of their palm oil trees.

General Chairman of Indonesia Cacao Association (Askindo) Zulhelfi Sikumbang said the same thing. He said the strengthening of the US dollar also influenced the increase in the farmer-level price of cacao.

According to him, at present, the farmer-level price of cacao has increased to Rp 28,000 per kg from the previous Rp 20,000 per kg. `The strengthening dollar makes farmers receive a higher cacao price in rupiah, because the cacao price is based on the dollar price. For exporters, it will also be beneficial. In general, this will increase the farmers' income,` explained Zulhelfi.

However, the Deputy Chairman of Indonesia Coffee Exporters Association (AEKI) considered the strengthening dollar has not had a significant impact on the increase in coffee price. The reason is, coffee price is more influenced by supply and demand. `The strengthening dollar does not affect the coffee price because the coffee price is based on the supply and demand, although in the recent times it was influenced by the