InfoSAWIT, JAKARTA – Member of Indonesia’s House of Representatives (DPR RI) Commission IV, Firman Soebagyo, has urged the government to immediately review its single-gate palm oil export policy managed by state-owned Danantara Sumber Daya Indonesia (DSI), warning that inadequate implementation could place pressure on Fresh Fruit Bunch (FFB) prices received by Smallholders.
Firman said he had received numerous complaints from oil palm farmers across several regions regarding falling FFB prices following the government’s announcement of the single-gate export mechanism.
“The government must understand that farmers are the most vulnerable parties when changes occur in commodity trade policies. When disruptions arise in export distribution chains, the first impact is usually declining FFB prices at the farm level,” Firman said in a written statement quoted on Monday (June 1, 2026).
According to Firman, several factors may be contributing to the pressure on FFB prices after the policy announcement.
The first concern relates to the potential build-up of crude palm oil (CPO) inventories at mills as export activities are routed through a single channel. Such a condition, he warned, could reduce mills’ capacity to absorb Smallholders’ harvests.
He also highlighted concerns among industry players over potentially higher administrative and distribution costs, which may erode business margins and encourage mills to lower FFB purchasing prices from farmers.
Another factor, Firman said, is uncertainty surrounding implementation mechanisms. Some overseas buyers and domestic industry players are reportedly delaying transactions while awaiting clearer regulations, slowing overall trading activity.
“Do not let the government’s good intention to improve palm oil governance instead create anxiety and losses for farmers. The palm oil sector has long been a pillar of the national economy and a source of livelihood for millions of families,” said the Golkar Party politician.
DPR Calls for Transition Period and Transparency
Firman, who also serves as Vice Chairman of the Indonesian Chamber of Commerce and Industry (KADIN), urged the government to establish an adequate transition period before fully enforcing the single-gate system.
He argued that existing export channels should remain temporarily available to prevent disruptions to Indonesia’s palm oil supply chain.
Firman also emphasized the importance of transparency in DSI’s operations, particularly regarding benchmark pricing, service charges, and trading mechanisms.
“The government must ensure that no policy harms farmers. Transparency, business certainty, and smooth distribution must remain top priorities. Farmers should not become victims of policy adjustments that are not yet ready for implementation,” he said.
As part of efforts to maintain supply balance and stabilize domestic palm oil prices, Firman encouraged stronger domestic absorption through biodiesel programs and accelerated downstream palm oil development.
“Farmers need certainty. The state must be present to protect them so FFB prices remain at fair and profitable levels,” he concluded. (T2)
