InfoSAWIT, JAKARTA – Executive Director of Palm Oil Agribusiness Strategic Policy Institute (Paspi), Tungkot Sipayung reminded the government to be careful in palm cooking oil policy in Indonesia. He emphasized it needs to anticipate it to avoid rare palm cooking oil supply because of its expensive price in the future.
“Palm cooking oil issue could be happening again. The government should be careful, this should not happen again. Indonesia is the biggest crude palm oil (CPO) producer in the world. This issue should actually be anticipated,” Sipayung recently said.
He also thought, every party, such as, the government, stakeholders, and the people need to learn from the previous case and try to improve the previous situation. The government should prepare palm cooking oil regulation and governance well.
Sipayung continued, as the biggest palm oil producer and consumer in the world within developing population and economy, Indonesia would encourage to increase oleofood consumption particularly palm cooking oil. Many studies revealed, vegetable oil markets in the world would get excess demands, at least, up to 2050. It means, palm oil price could be increasing globally as it was in 2022. “If there is no good policy, rare palm cooking oil could be happening in our country,” he said, as in the official statement to InfoSAWIT.
Vegetable oil price in the world, including palm oil could increase significantly. World Bank (2022) data showed that soyoil increased from US$ 748 per ton in January 2019 to be US$ 1,957 per ton in March 2022. In the same period, palm oil increased from US$ 537 per ton to be US$ 1,823 per ton. “The expensive CPO made palm cooking oil also expensive in our country,” Sipayung said.
The increasing palm oil price made dilemma to export (to get exchange) but has to secure domestic need. If the dilemma has no solution, it could raise political and legal issues like it happened some time ago. The solution for the dilemma could be by sharing responsibility. The private corporates that produce palm cooking oil should not be in charge to provide palm cooking oil in this country. “Let them freely export to get exchange from many countries,” Sipayung said.
To supply palm cooking oil in this country for medium to lower economic class, he continued (about 50 percent of total consumption in this country), the Enterprises (PT Perkebunan Negara (PTPN), ID Food, Bulog) should be in charge. PTPN now could produce about 1,6 million tons of palm cooking oil and could be increasing. If the consideration needs to get highest retail price (HRP) in this country, the government should deliver duty for Enterprises to get it done. The export price gap and HRP should be covered by palm oil fund.
It means, private corporates could export palm oil for the world without having domestic market obligation (DMO) obligation. The Enterprises could maintain palm cooking oil supply for the people. It needs to be regulated as same level as president’s regulation. In 1971 - 1990, Indonesia once adopted this same situation and it was successful.
“It means, there would be dilemma or palm cooking oil trade off to export versus to the people. What happened in the past would not happen again,” he said. (T2)
