SPKS Raises Concerns Over Proposed Single-Gate Palm Oil Export Scheme Through DSI

InfoSAWIT, JAKARTA – The government’s plan to mandate palm oil exports through a single gateway under Danantara Sumberdaya Indonesia (DSI) is beginning to spark concern among palm oil Smallholders. The Palm Oil Smallholders Union (SPKS) reported that fresh fruit bunch (FFB) prices in several production centers have fallen sharply in recent days, with some dropping to as low as Rp1,500 per kilogram.

The price decline has been reported across multiple palm oil-producing regions and is said to be fueling anxiety among Smallholders. Several farmers reported steep declines in FFB prices within just the past two days.

Yakobus Hariyanto, a palm oil Smallholder from Sintang, West Kalimantan, said FFB prices in his area had dropped by around Rp1,000 to Rp1,500 per kilogram.

“Farmers are panicking because FFB prices have fallen very quickly within days to around Rp1,500 per kilogram. Many companies are also taking a wait-and-see approach and have even temporarily suspended purchases. With the massive scale of Smallholders’ production, farmer losses could reach billions of rupiah every day,” Yakobus said.

Similar complaints have emerged from West Sulawesi. Supriyadi, a palm oil Smallholder from Mamuju, said FFB prices that had previously hovered around Rp2,800 per kilogram had now plunged to roughly Rp1,000 per kilogram.

In North Sumatra, Parlindungan Sitorus, a Smallholder from Labuhanbatu, also reported price declines of up to Rp1,500 per kilogram at the farmer level.

Beyond weakening prices, farmers said they are increasingly worried as several mills have started reducing or even halting FFB purchases. The situation is viewed as highly risky, given that palm fruit must be sold quickly and cannot be stored for extended periods.

SPKS Chairman Sabarudin said the sharp drop in FFB prices reflected a negative market response to the proposed single-gate export system, which farmers fear could create monopsony conditions, or a single-buyer market.

“The situation worsened after several companies began holding back purchases and temporarily suspending sales,” Sabarudin said in an official statement received by InfoSAWIT on Sunday (24/5/2026).

According to SPKS, the situation has already caused significant losses among palm oil Smallholders.

“We estimate Smallholders’ losses have reached tens of billions of rupiah per day,” Sabarudin said.

SPKS believes the proposed single-gate export policy through DSI could pressure FFB prices at the farmer level if it leads to a single-buyer mechanism. The impact, the organization argues, would not only reduce Smallholders’ incomes but also threaten the sustainability of smallholder plantation productivity.

The farmers’ organization said some growers are now considering reducing or even stopping fertilizer applications due to concerns that palm oil prices may continue falling while production costs become increasingly difficult to cover. This issue is particularly significant given that around 40 percent of Indonesia’s palm oil supply comes from Smallholders, whose livelihoods depend heavily on stable pricing.

If price pressures persist over the long term, Smallholder productivity is expected to decline and could eventually affect national palm oil supply.

Sabarudin said many farmers still carry the trauma of the 2015 price crisis, when FFB prices fell below Rp1,000 per kilogram.

“Farmers remain traumatized by what happened in 2015 when FFB prices dropped below Rp1,000 per kilogram. At that time, many farmers cut down their oil palm trees and switched to other commodities because they could no longer survive,” he said.

SPKS also highlighted the potential implications of the policy for the government’s B50 biodiesel program. According to the organization, if Smallholder productivity declines due to reduced fertilization and more farmers abandon oil palm cultivation, domestic feedstock supply could be disrupted.

In addition, SPKS urged the government not to repeat past commodity trading policies that were seen as suppressing farm-gate prices, citing the former Clove Buffer and Marketing Agency (BPPC) as an example.

For that reason, SPKS is calling on the government to immediately review the proposed single-gate palm oil export system through DSI before tensions among farmers escalate further.

“We hope the government is willing to listen to the concerns of millions of farmers across Indonesia before the situation deteriorates further,” Sabarudin concluded. (T2)