InfoSAWIT, BOGOR – Civil society organization Sawit Watch has criticized the government’s plan to establish a centralized export management body for strategic commodities, including crude palm oil (CPO), warning that the policy could weaken independent smallholders and concentrate market power in the hands of a few major players.
The concern emerged after Indonesian President Prabowo Subianto announced plans to restructure the export governance of strategic natural resources as part of the 2027 Macroeconomic Framework and Fiscal Policy agenda. Under the proposal, a state-owned enterprise (SOE) would be appointed to manage exports of commodities such as palm oil, coal, and ferroalloys.
Sawit Watch acknowledged that the initiative may strengthen Indonesia’s ambition to gain greater control over global CPO pricing. However, the organization argued that a highly centralized export system risks creating a monopsony structure that could weaken farmers’ bargaining power.
“Creating a single export gateway for CPO effectively puts smallholders in a vulnerable position. Without competition among buyers and exporters, farmers will lose their negotiating leverage,” Sawit Watch Executive Director Achmad Surambo said in a statement received by InfoSAWIT on Thursday (21/5/2026).
According to Sawit Watch, the policy could contradict the government’s own welfare targets outlined in the 2027 fiscal framework, which aims to improve the Farmer Welfare Index from 0.7731 in 2026 to 0.8038 in 2027. The organization warned that any inefficiencies, bureaucracy, or price fluctuations resulting from the new system could ultimately be passed down to farmers through lower fresh fruit bunch (FFB) prices.
Concerns Over Corporate Domination
Sawit Watch also cautioned that Indonesia’s ambition to become a global palm oil price setter would hold little meaning if industry profits remain concentrated among large corporations.
“Becoming a global price setter means nothing if the domestic palm oil industry continues to be dominated by a handful of corporations, remains exploitative toward workers, and fails to ensure fair economic welfare for millions of smallholders,” Surambo stressed.
Beyond pricing concerns, the organization warned that the policy could worsen agrarian conflicts and environmental pressures if not accompanied by broader reforms in the palm oil sector. Rising global CPO prices, it said, may encourage aggressive plantation expansion, potentially triggering further deforestation and land disputes involving indigenous and local communities.
Sawit Watch urged the government to review the single-exporter plan and ensure meaningful participation from independent smallholders, farmer organizations, cooperatives, and civil society groups in shaping future export governance policies. (T2)
