PALMOILMAGAZINE, JAKARTA — Global trade disparities in the agricultural sector are once again under scrutiny. Palm oil industry expert and plantation observer, Maruli Gultom—former President Director of PT Astra Agro Lestari Tbk.—emphasized the urgent need for Indonesia to demand fairer prices for its agricultural commodities, which are still largely exported in raw form.
Speaking at the International Food & Agricultural Trade Policy Council (IPC) in Stratford-upon-Avon, UK, several years ago, Gultom represented Indonesia in a high-level forum attended by major global food corporations such as Nestlé, Unilever, and Procter & Gamble. He addressed the issue of environmental sustainability in palm oil and biofuel production.
“I found a box of English Tea bags in my hotel room. But since when has England grown tea?” Gultom asked during his presentation, as quoted by Palmoilmagazine.com from his official blog on Tuesday (May 20, 2025). He criticized the dominance of Western countries in commodity trade—even for goods like tea, coffee, cocoa, rubber, and palm oil, which they do not grow themselves.
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Gultom pointed out that developed countries disproportionately benefit from the value-added side of agricultural commodities. “Branded tea bags can sell for 40 to 80 times more than the price farmers receive for raw tea leaves,” he noted.
He highlighted similar inequalities in the palm oil sector. Although Indonesia is the world’s largest producer of Crude Palm Oil (CPO), the bulk of added value is still captured by downstream processors abroad.
According to Gultom, the core issue lies not in Indonesia’s role as a raw material supplier, but in its failure to turn that position into real bargaining power. “As a leading global supplier, we are entitled to demand fair prices for our agricultural goods,” he stressed.
He cited the success of oil-producing countries within OPEC, which collectively manage supply to influence global prices. Gultom believes that a similar approach could be applied by commodity-producing nations—such as those exporting palm oil, rubber, and cocoa.
“Imagine if we reduced palm oil or rubber exports. Corporations like Nestlé or Michelin wouldn’t sit idly by. A tighter supply would drive prices up—and that benefits our farmers,” Gultom explained.
He also criticized current government policies that remain reliant on exporting raw materials—such as crude oil—while importing finished fuel products due to a lack of domestic refining capacity.
Concluding his remarks, Gultom called on the government to act decisively and wisely to establish a fairer global trade system. “We’ve been like starving mice in a rice barn for too long. It’s time we change course,” he asserted. (P2)
