PALMOILMAGAZINE, JAKARTA – Indonesian Agriculture Minister Andi Amran Sulaiman has issued a stern warning to hundreds of palm oil companies that have yet to raise Fresh Fruit Bunch (FFB) prices paid to smallholders, despite a significant increase in global crude palm oil (CPO) prices and the strengthening of the U.S. dollar against the rupiah.
The government, together with the National Police Food Task Force, plans to investigate approximately 270 to 300 companies suspected of failing to adjust FFB prices in line with provincial pricing guidelines.
The decision was reached during a Coordination Meeting on the Development and Stabilization of Palm Oil FFB Prices held at the Ministry of Agriculture headquarters in Jakarta on Monday (June 8, 2026). The meeting brought together farmer associations, plantation companies, exporters, refinery operators, the Police Food Task Force, and representatives from the Special Criminal Investigation Units (Dirkrimsus) of regional police offices across 25 palm oil-producing provinces.
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“Today we agreed that there should be no further decline in FFB prices. Prices must return to previous levels and, if necessary, move even higher. The U.S. dollar has appreciated by around 10 percent against the rupiah, so prices should at least recover to their earlier levels,” Amran said.
According to the minister, the recent decline in FFB prices represents an anomaly. While global CPO prices have surged and the U.S. dollar has strengthened by more than 10 percent against the rupiah, FFB prices in some regions reportedly fell by as much as 17 percent.
“We have the data. Global CPO prices have increased by 47 percent, the dollar exchange rate has risen by more than 10 percent, yet FFB prices declined. This is an anomaly. There is no reason prices should not return to normal levels, and they should actually be around 10 percent higher than before,” he said.
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Amran stressed that the government would not tolerate practices that disadvantage palm oil farmers. Ministry data indicate that approximately 15 million Indonesian farmers depend on the palm oil sector for their livelihoods.
“We must protect our farmers. There are 15 million palm oil farmers in Indonesia. We cannot allow them to suffer losses. If global prices and the exchange rate are rising while farmgate prices are falling, that simply does not make sense,” he added.
The minister revealed that the issue has received direct attention from President Prabowo Subianto. During his recent pilgrimage to Saudi Arabia, Amran said the President contacted him twice to ensure the government was taking concrete measures to safeguard farmers’ interests.
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“The President’s directive is very clear: defend the farmers. FFB prices must return to previous levels and increase by around 10 percent in line with global market and currency movements,” Amran said.
The meeting’s evaluation showed that roughly 70 percent of FFB prices across producing regions have begun to recover. However, the government is seeking a full and immediate restoration of prices nationwide.
“Starting today, there will be no compromise. Prices must return to normal. Companies that fail to comply will be investigated,” he emphasized.
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To strengthen oversight, the Ministry of Agriculture will distribute data on companies suspected of non-compliance to regional police investigators, accompanied by official benchmark prices established by provincial governors.
During the meeting, farmer representatives from Sumatra, Kalimantan, Sulawesi, and Banten reported that prices at palm oil mills had started to improve. However, they noted that the increases had not yet been fully passed on to farmers. Several regions continue to report significant gaps between farmgate prices and government-set reference prices.
Responding to these concerns, Amran said the government’s role is to ensure fairness across the palm oil value chain.
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“We want to build a healthy ecosystem where farmers prosper, businesses prosper, and everyone grows together. The government is simply acting as a referee to ensure that no party is disadvantaged,” he said.
Amran further highlighted the strategic importance of the palm oil industry in strengthening Indonesia’s position in the global vegetable oils market. Through downstream processing initiatives, expanded bioenergy programs, implementation of the B50 biodiesel mandate, and bioethanol development, the government aims to generate greater value from domestic palm oil production.
“Indonesia is the world’s largest palm oil producer. The President’s vision is to position Indonesia as a leading force in the global CPO market through downstream development and the use of palm oil as an energy source. Farmers must be the first to benefit from that transformation,” Amran concluded. (P3)
