Jakarta (The Indonesian News) – Minister of Agriculture Andi Amran Sulaiman said President Prabowo Subianto has been closely monitoring the recent plunge in fresh fruit bunch (TBS) prices for palm oil. Amran said the price drop is suspected to be the result of price manipulation.
Amran said Prabowo does not want farmers to become victims of price games. The President even called him directly to ask for as detailed an explanation as possible regarding the situation.
“We received a call from him and he asked, ‘Minister, why has there been a decrease?’ I told him, this is an anomaly,” Amran said after meeting Prabowo at the State Palace on Thursday (June 18).
Amran told Prabowo that the situation is economically nonsensical. Global crude palm oil (CPO) prices have risen, and the US dollar exchange rate has strengthened by around 10 percent. Yet at the same time, TBS prices received by farmers have actually fallen.
“This is unreasonable,” Amran said.
In response to the situation, the Ministry of Agriculture gathered palm oil industry players from various regions across Indonesia. The meeting involved representatives of around 700 companies out of the 1,900 palm oil mills operating nationwide .
Amran emphasized that the government will not allow farmers to become victims of practices that harm them.
“We ask that you not play games. Do not sacrifice the people. There are 15 million smallholder farmers, and with their families, an estimated 30 million people,” he said .
He stated that Prabowo’s directive is clear: to ensure government policies side with palm oil farmers, particularly smallholders who are the backbone of national palm oil production.
From the government’s evaluation, 274 mills were recorded as having not adjusted TBS prices in line with market conditions. However, after guidance and oversight, the majority of these companies have raised their TBS purchase prices .
“Of those 274, they have now increased prices. Those that still haven’t are around 100 companies, or about 5 to 10 percent,” Amran added .
According to him, about 90 percent of TBS prices have now returned to near-normal conditions. The government is optimistic that recovery will continue in the near future.
To accelerate price adjustments, the Ministry of Agriculture has also enlisted law enforcement. Amran said he has sent a letter to the National Police chief to follow up on findings of companies that have not adjusted TBS prices .
“We immediately sent a letter to the National Police chief that this must be followed up. Copies were sent to regional police chiefs and the Special Crimes Directorate,” he explained .
Amran said these steps are beginning to show results. The number of companies that have not adjusted TBS prices continues to decline, and the government expects conditions to return to normal within a week .
Furthermore, Amran said he will implement a more integrated palm oil export trading system in the future to improve farmers’ welfare while closing loopholes in the commodity’s trade chain.
“The hope is that this single-door system can lift the welfare of Indonesian farmers and avoid leakages. God willing, TBS prices will be better in the future,” he said .
Source: Press Release from the Government Communications Agency (Bakom) of the Republic of Indonesia
