InfoSAWIT, JAKARTA – Indonesia’s planned single-gate export system for strategic natural resource commodities has drawn renewed scrutiny from palm oil smallholders, who fear additional costs could eventually reduce fresh fruit bunch (FFB) prices at the farm level.
The concern follows the issuance of Government Regulation (PP) No. 24/2026 on the Governance of Strategic Natural Resource Commodity Exports. Under Article 3 Paragraph 4 of the regulation, the designated state-owned export enterprise is permitted to apply a margin considered reasonable under prevailing laws and regulations.
Sabarudin, Chairman of the Indonesian Oil Palm Smallholders Union (SPKS), urged the government to provide greater transparency regarding the margin mechanism and pricing formula to be applied by Danantara Sumberdaya Indonesia (DSI), the state-owned entity tasked with managing the single-gate export system for palm oil.
According to SPKS, any unclear margin structure risks becoming an additional layer of cost within the palm oil supply chain, potentially leading to lower FFB prices for smallholders.
“Smallholders support efforts to improve export governance, but new costs should not come at the expense of farmers’ incomes,” Sabarudin said in a statement received by InfoSAWIT.
SPKS acknowledged that strengthening Indonesia’s bargaining position in strategic commodity exports is a positive step that could improve trade coordination and enhance partnerships between farmers and companies. However, the organization stressed that previous industry cost burdens have often been passed down to growers.
The group cited export levies as an example, arguing that such charges have historically influenced FFB pricing and, in some cases, reduced farm-gate prices by an estimated Rp500 to Rp1,000 per kilogram.
As a result, SPKS is urging policymakers to ensure that DSI’s future margin structure does not create additional pressure on independent smallholders. The concern comes amid market volatility, with reports indicating that FFB prices in several producing regions weakened after the single-gate export policy was announced, despite relatively firm global CPO prices.
Calls for Stronger Oversight
Beyond pricing concerns, SPKS is also emphasizing the need for robust governance and oversight mechanisms. The organization argues that an institution responsible for managing large export transactions and foreign exchange revenues must operate under strict transparency and accountability standards.
The association proposed that DSI publish quarterly financial reports and undergo regular independent audits, with findings made publicly available. It also recommended the establishment of an independent oversight mechanism involving parliamentary participation and investigative authority should irregularities arise.
According to SPKS, transparency will be essential to maintaining market confidence and ensuring the single-gate export system delivers benefits across the palm oil value chain, including for smallholders.
The organization therefore urged the government to clearly explain the rationale behind DSI’s margin policy, the methodology used in determining it, and safeguards to ensure it does not negatively affect farm-gate FFB prices.
For SPKS, the success of Indonesia’s palm oil export governance reform should not be measured solely by increased state revenue or trading efficiency, but also by its ability to protect the livelihoods of millions of oil palm smallholders who remain a vital part of the industry’s supply chain. (T2)
