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The Smallholders’ FFB Price and the Increasing Exchange of Dollar



The Smallholders’ FFB Price and the Increasing Exchange of Dollar

InfoSAWIT, JAKARTA -The planters may have long bad stories if the CPO selling price gets cheaper. For the smallholders in specific, the cheaper fresh fruit bunch (FFB) would be the continuous misery in their lives.

After the FFB price was distorted by the Out Fee and CPO Supporting Fund (CSF) taken by Palm oil Plantation Fund Management Agency (PFMA), the smallholders’ FFB selling price gets cheaper because the cheaper CPO selling price in the international trade. This is the reference for FFB selling price nationally.

A smallholder in East Kalimantan Province, Ali (52) experienced it. He who has been working for about 10 years thought, his hard works, starting from cultivating, nursing, or even harvesting, seem useless because the FFB selling does not make profit for him.

He could harvest 2,8 tons in average from his 2 hectare-plantation. In general, he could sell the harvest for about Rp 1.500 per kilogram. He said that he could get gross income up to Rp 4,2 million in every single month. Having the numbers he should pay someone to nurse his plantation, earn his family – his wife and two children who study in elementary and junior high school.

But last month, he drastically got decreasing income for the FFB selling price was about Rp 1.100 per kilogram. Ali only got about Rp 3.080.000. It influenced his life because he needs Rp 4 million to earn his family.

 

His simple life helps him to save the rests of the income in every single month. When FFB selling price is cheap, his safe helps him and his family to earn the daily needs.

 

Knowing the life story of Ali as the smallholder, it may be as the general description of the smallholders who always be ‘up and down’ because of the fluctuation of the FFB selling price. What Ali experienced could be the description of the smallholders who have hard lives still.

 

If Ali could save his income when the harvests are more, many smallholders have different styles if the harvests are more. In one side, the cheaper FFB selling price in the future days would be new dilemma for their lives. It always happens that the smallholders fail and should sell their palm oil plantations.

 

Actually, the cheaper CPO selling price in the international trade would not be too influence because CPO is still the ‘primadona’ of the vegetable oil in the world. In the other side, CPO is the original product from Indonesia within Rupiah and it does not change the value of its production.

 

Palm oil industry which is produced in Rupiah and sold it in Dollar would get ‘windfall profit’. In simple term, there would be additional profit, such as, the increasing exchange of Dollar toward Rupiah. It means, the cheaper CPO selling price in international trade should not influence the FFB selling price.

 

This article once published in InfoSAWIT August 2018

 


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