PALMOILMAGAZINE, BOGOR – Indonesia’s plan to establish a single export management body for strategic commodities, including crude palm oil (CPO), is drawing criticism from civil society groups. Sawit Watch warned that an overly centralized export governance system could threaten the livelihoods of independent oil palm smallholders and undermine the government’s own target of improving farmer welfare.
The concern emerged after Indonesian President Prabowo Subianto outlined plans to reform the country’s natural resource export system during his presentation of the 2027 Macroeconomic Framework and Fiscal Policy Priorities (KEM PPKF). Under the proposal, the government would appoint a single entity or state-owned enterprise to manage exports of strategic commodities such as palm oil, coal, and iron alloys.
According to Sawit Watch, while the proposal may appear promising in strengthening national economic sovereignty and Indonesia’s ambition to become a global CPO price setter, it also carries significant risks for small farmers.
In a statement received by Palmoilmagazine.com on Thursday (21/5/2026), Sawit Watch Executive Director Achmad Surambo said that concentrating exports through a single gateway could eliminate competition among buyers and exporters.
“Creating a single export gate for CPO effectively places smallholders in a vulnerable position. Without competition among buyers and exporters, farmers will lose their bargaining power,” Achmad Surambo said.
He argued that such a system contradicts the government’s own target in the 2027 KEM PPKF, which aims to raise the Farmer Welfare Index from 0.7731 in 2026 to 0.8038 in 2027. Sawit Watch believes that any bureaucratic inefficiency or global price fluctuation under the centralized system would likely be passed down to farmers through lower fresh fruit bunch (FFB) prices.
Concerns Over Growing Corporate Dominance
Sawit Watch also warned that Indonesia’s ambition to become a global palm oil price setter would mean little if the industry’s economic gains continue to be concentrated among a handful of large corporations.
“Becoming a global price setter is meaningless if the domestic palm oil industry remains dominated by a small number of corporations, continues exploiting workers, and fails to ensure fair economic welfare for millions of smallholders,” Achmad Surambo stressed.
Beyond pricing concerns, the organization said the policy could also intensify agrarian conflicts and environmental pressure if not accompanied by broader reforms in palm oil governance.
Sawit Watch warned that higher global CPO prices could trigger aggressive plantation expansion, potentially accelerating deforestation and prolonging land disputes between companies, indigenous communities, and local residents.
Also Read: KPBN CPO Prices Fell 5.77% on May 20 as Indonesia’s Export Reform Weighs on Global Market Sentiment
Calls for Inclusive Policy-Making
Sawit Watch urged the government to review the proposal for a single export management body, arguing that it could effectively create a monopsony structure within Indonesia’s palm oil trade chain.
The organization also called on the government to ensure a fair minimum FFB purchasing price for farmers, maintain domestic cooking oil supply security, and provide meaningful participation for independent smallholders and civil society groups in shaping strategic commodity export policies.
Sawit Watch emphasized that national economic sovereignty should not come at the expense of small farmers or environmental sustainability.
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“The state’s export architecture should function as a tool to distribute justice, not to centralize profits while marginalizing grassroots communities,” Achmad Surambo concluded. (P2)
