PALMOILMAGAZINE, PALEMBANG – The South Sumatra Provincial Government, through the Plantation Agency (Disbun Sumsel), has called on all stakeholders in the palm oil industry to safeguard Fresh Fruit Bunch (FFB) price stability and maintain regional economic stability following recent adjustments to Indonesia’s natural resource export governance policy.
In an official circular numbered 500.8/902-VI.3/BUN dated May 25, 2026, the agency noted that the national policy transition had triggered market reactions, including declining FFB purchase prices at the farmer level, despite relatively stable global Crude Palm Oil (CPO) prices.
Acting Head of the South Sumatra Plantation Agency, M. Ichwansyah, warned that the widening imbalance between international CPO prices and local FFB purchasing prices could create economic uncertainty and disrupt regional stability if not addressed promptly.
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“This price imbalance has the potential to create economic uncertainty and disturb regional stability if not handled in a timely and measured manner,” Ichwansyah stated in the circular reviewed by Palmoilmagazine.com on Wednesday (27/5/2026).
To address the situation, Disbun Sumsel instructed plantation offices across regencies and municipalities to strengthen monitoring and supervision of FFB purchasing practices at the plantation level. Local governments were also urged to ensure that all FFB transactions comply with official pricing determined regularly by the South Sumatra Provincial Pricing Team, while taking action against any pricing violations or manipulation outside prevailing regulations.
The agency further appealed to plantation companies and Palm Oil Mills (PKS) in South Sumatra not to impose unilateral reductions in FFB purchasing prices under the pretext of adapting to the new export regulations. Palm oil mills are required to continue adhering to prices established by the provincial government in accordance with applicable rules, including Minister of Agriculture Regulation No. 13/2024 and gubernatorial decrees governing FFB pricing formulas for partnered smallholders.
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Disbun Sumsel also encouraged the South Sumatra chapter of the Indonesian Palm Oil Association (GAPKI) to actively coordinate plantation firms and mills in maintaining fair and regulation-compliant FFB purchasing prices.
Meanwhile, all palm oil mills in the province have been instructed to regularly submit FFB purchasing price data to the Directorate General of Plantations starting from May 19, 2026, while also forwarding copies of the reports to the South Sumatra Plantation Agency.
On the smallholder side, farmer associations such as ASPEKPIR and APKASINDO were urged to educate palm oil farmers to remain calm, avoid speculative or anarchic actions, and formally report any suspected pricing violations committed by palm oil mills.
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Disbun Sumsel emphasized that strong coordination and compliance among all stakeholders will play a crucial role in ensuring the sustainability of South Sumatra’s palm oil industry during the current policy transition period.
“The synergy and compliance of all stakeholders are critical in maintaining the sustainability of the palm oil industry in South Sumatra during this policy transition,” Ichwansyah concluded. (P2)
