The Indonesian government will push the acceleration of crude palm oil (CPO) exports to boost the price of palm oil fresh fruit bunches (FFB) at the level of farmers.
Through a statement on Tuesday, Trade Minister Zulkifli Hasan noted that the policy to ban CPO exports some time back had caused the domestic crude palm oil stock to rise that had led to the price of FFB plunging.
As a result, CPO exports had to be bolstered, so that companies can optimize the absorption of farmers’ palm stocks.
“If the export is successful, then factories can empty their tanks. Once the tanks are empty, companies will compete with one another to purchase fresh fruit bunches,” he explained.
According to data from the Trade Ministry as per July 4, 2022, the export agreement on CPO, RBD Palm Oil, RBD Palm Olein, and UCO acceleration program through the DMO Simirah scheme was recorded to reach 1.31 million tons.
Moreover, the realization figure reached 65.91 percent, or 885,500 tons, which means the unrealized volume touched 434,067 tons.
Meanwhile, the export agreement on CPO, RBD Palm Oil, RBD Palm Olein, and UCO acceleration program through the flush out scheme was pegged at 1.09 million tons.
In addition, the realization percentage stood at 49.51 percent, or equivalent to 645,327 tons, which left 447,563 tons of unrealized volume.
“The average (export) only reached 60 percent, so it is not yet empty,” Hasan noted.
The government also changes the domestic market obligation (DMO) of crude palm oil from 1:5 to 1:7 as one of the methods to handle the price of farmers’ FFB that is considered as being cheap.
The minister urged crude palm oil processing factories to purchase the farmers’ FFB at a price of Rp1,600 per kilogram. If the CPO stock can be exported quickly, then the factories will purchase more FFB.
“We expect that the price will reach the standard of at least Rp2,000, Rp2,500, or even until Rp3,000 per kilogram,” he remarked.
Source: Antara News