Palm Oil Smallholders Mention that the CPO Exchange Has Not Provided Benefits

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Palm Oil Mill. Photo by: Sawit Fest 2021 / Arie Basuki

PALMOILMAGAZINE, JAKARTA – Despite the operation of the Indonesian CPO Exchange, there hasn’t been a significant increase in the prices of FFB, particularly those produced by independent smallholders.

Sabarudin, the Chairman of the Serikat Petani Kelapa Sawit (SPKS), emphasized the importance of the Indonesian Crude Palm Oil (CPO) Exchange in determining the prices of fresh fruit bunches (FFB) produced by smallholders in Indonesia.

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He noted that one contributing factor to this situation is the lack of a policy to standardize the pricing of smallholders’ FFB in CPO trading on the exchange. In his official statement to on Wednesday, February 21st, 2024.

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He expressed his hope that the Indonesian CPO Exchange, managed by Bursa Komoditi Derivatif Indonesia (ICDX), would collaborate with PT Kharisma Pemasaran Bersama Nusantara (KPBN) to enhance liquidity and market competition.

He thought Indonesian CPO Exchange has the potential to respond the change in FFB supplies faster than it in other foreign stocks. He also told when FFB supply is difficult to get, as the response, CPO gets more expensive. While the harvests get abundant, FFB price would be adjustable.

To be effective, it needs more straight policy to regulate daily selling and supply so that CPO selling price would be positively delivering welfare for the smallholders.

He continued, Indonesia CPO Exchange should be more proactive to manage daily supply and demand so that CPO selling price would encourage smallholders to be better and become the main pillar for palm oil industries in Indonesia.

Though there are challenges to be solved, such as, coordination among related instances, effective policy implementation, Sabarudin remained optimist that Indonesian CPO Exchange would have the big potential to escalate the smallholders’ welfare in Indonesia if it is well managed and having synergy with related stakeholders. (T2)

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