PALMOILMAGAZINE, PEKANBARU – The Riau Provincial Government, through its Plantation Agency (Disbun), has officially issued a circular letter in response to growing economic and social concerns following the government’s proposed regulation on the export governance of strategic natural resources.
The circular, numbered B/151/500.8/DISBUN/2026 and issued on Saturday (23/5/2026), was introduced as an anticipatory measure amid rising volatility in fresh fruit bunch (FFB) prices at the farmer level.
Head of the Riau Plantation Agency Supriadi said the agency had observed unilateral reductions in FFB purchasing prices by several market players, despite the fact that global crude palm oil (CPO) prices — one of the main references for FFB pricing — had not experienced any significant decline.
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“This instability has the potential to disrupt regional stability, which became the main reason for issuing the circular. The central government’s policy is fundamentally intended to strengthen the long-term downstream development of the national palm oil industry and should not be used as justification for speculative actions that harm farmers,” Supriadi said, as quoted by Palmoilmagazine.com from Media Center Riau on Monday (25/5/2026).
Riau Strengthens Monitoring of FFB Prices
Through the circular, Disbun Riau instructed plantation agencies across regencies and municipalities in Riau to intensify field supervision, particularly regarding the implementation of FFB purchasing prices.
The monitoring effort aims to ensure that all transactions continue referring to the official FFB prices periodically set by the Riau Plantation Agency.
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The move was taken to prevent unauthorized price reductions outside official mechanisms, especially amid increasing market uncertainty.
The provincial government also stressed that it would not tolerate price manipulation practices or violations that could harm oil palm smallholders.
Palm Oil Mills Urged to Follow Official Pricing Mechanism
The circular specifically reminded plantation companies and palm oil mills (PKS) in Riau not to reduce FFB purchasing prices unilaterally under the pretext of adjusting to new central government policies.
Supriadi emphasized that all mills are required to comply with the pricing decisions issued by the Riau FFB Pricing Team, as stipulated under Minister of Agriculture Regulation No. 13 of 2024.
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The regulation is further reinforced by Riau Governor Regulation No. 77 of 2020 concerning procedures for determining FFB purchasing prices for smallholder production in the province.
According to Disbun, the FFB pricing mechanism has been designed through the involvement of multiple stakeholders, including the government, farmers, and business actors, meaning its implementation must be carried out consistently and responsibly.
GAPKI and Farmer Associations Asked to Remain Active
In addition to targeting palm oil mills, the Riau Plantation Agency also called on the Indonesian Palm Oil Association (GAPKI) to coordinate with member companies to ensure they continue purchasing FFB at fair prices in accordance with existing regulations.
At the same time, farmer associations such as ASPEKPIR, APKASINDO, and SAMADE were urged to help educate farmers and prevent panic amid ongoing market dynamics.
The associations are expected to encourage their members to avoid speculative actions or activities that could potentially disrupt regional stability. They were also asked to immediately report any suspected violations by palm oil mills regarding FFB purchasing practices.
Supriadi said strong coordination among all stakeholders remains crucial to maintaining the sustainability of the palm oil industry, particularly during the current policy transition period.
“Synergy and compliance from all stakeholders are the main pillars in safeguarding the sustainability of the palm oil industry,” he concluded. (P2)
