SPKS Advocates for the Supervision of Palm Cooking Oil DMO to Protect the Welfare of Smallholders

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Sabarudin, Chairman of SPKS. Photo by: Palmoilmagazine.com

PALMOILMAGAZINE, JAKARTA – The Union of Oil Palm Smallholder (Serikat Petani Kelapa Sawit / SPKS) advocates for strict supervision of the implementation of the Domestic Market Obligation (DMO) of palm cooking oil which is still in effect today. They highlighted the recent surge in the selling price of palm cooking oil, which reached Rp. 15,000 per liter. This is considered a violation of market regulations, considering that the Highest Retail Price (HET) set by the Government is Rp. 14,000 per liter or Rp. 15,500 per kg.

Sabarudin, Chairman of SPKS, emphasized that the Government needs to enforce regulations to ensure the availability of affordable cooking oil for the community, with prices not exceeding IDR 14,000 per liter. He explained that the current price hike ahead of Lebaran is part of the global vegetable oil business cycle, including palm oil. Although CPO prices have been rising since the beginning of 2024, business players, including oil palm farmers, are still earning relatively good profits.

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According to data collected by SPKS, the selling price of fresh fruit bunches (FFB) ranges from IDR 2,200 to IDR 2,500 per kg. However, in several SPKS farmer groups in the Southeast Sulawesi region, the price is still stable at around Rp. 1,900 per kg.

Also Read: The People’s Cooking Oil DMO Policy Proposed to be Improved

“The selling price of FFB of palm oil farmers is still relatively stagnant and does not experience a drastic increase in price,” Sabarudin explained to Palmoilmagazine.com.

According to Sabarudin, the regulation of CPO export trade and its derivatives that requires DMO of 1 to 4 is still relevant to be done. Because, the growth of domestic palm oil derivative industry still needs sustainable supply of raw materials.

“The DMO regulation implemented by the government at this time is still relevant to the raw material needs of the downstream palm oil industry,” said Sabarudin.

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According to him, the DMO supply is right on target, regulated by the export quota carried out by exporters. “So that domestic supply can be guaranteed and fulfilled,” he explained. He added that despite fluctuations in the selling price of CPO, the average CPO price was still favorable to business actors.

Palm Oil Smallholders FFB Supply Certainty

Furthermore, SPKS expects support from the government, to ensure the supply of CPO originating from the FFB of oil palm farmers. “The source of FFB supply directly from farmers to Palm Oil Mills must continue,” he said.

The supply of FFB raw materials from oil palm farmers is needed, so that the strengthening of farmer organizations and training in sustainable cultivation practices based on the Indonesian Sustainable Palm Oil (ISPO) certification, gets certainty of sustainable market absorption.

“ISPO certification of oil palm farmers is part of the sustainability of the national palm oil industry,” he explained.

In the future, ISPO certification is also expected to continue and be developed through a jurisdictional approach, so that the collaboration of the Central and Regional Governments, NGOs, companies, farmers and communities can be more effective. “It is expected to involve more farmers and the wider community, so that ISPO certification can continue to grow,” he emphasized. (T1).

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