InfoSAWIT, JAKARTA – Indonesia's Ministry of Agriculture says fresh fruit bunch (FFB) prices paid to oil palm smallholders have begun to recover following weeks of government intervention, with most palm oil companies now adjusting their procurement prices closer to official regional benchmarks.
According to a statement received by InfoSAWIT on Friday (June 26), the improvement follows intensive market supervision led by Agriculture Minister Andi Amran Sulaiman, Deputy Agriculture Minister Sudaryono, and the National Police's Food Task Force, which engaged directly with palm oil companies, industry associations, and farmer representatives.
The intervention came after FFB prices fell sharply despite firm global crude palm oil (CPO) prices and a stronger U.S. dollar, raising concerns that domestic growers were not benefiting from favorable international market conditions.
Agriculture Minister Andi Amran Sulaiman said most palm oil companies have now revised their buying prices, with daily ministry monitoring indicating that compliance continues to improve.
"FFB prices have increased. Around 80–85% of companies have adjusted their prices, and now it is probably close to 90%. Those that have not complied are still being investigated together with the Food Task Force," Amran said.
He noted that the number of companies yet to align their procurement prices has fallen significantly. Earlier, around 270 companies were identified as purchasing FFB below appropriate market levels. That figure has now dropped to approximately 130 companies.
"We continue monitoring them nationwide. Our objective is not only to ensure prices rise, but also to prevent them from falling again after temporary adjustments," he added.
Amran said the government's focus extends beyond restoring prices, emphasizing the importance of maintaining a fair and transparent palm oil trading system that protects growers over the long term.
He added that safeguarding smallholders' welfare is a direct priority of President Prabowo's administration, prompting continued coordination between the Ministry of Agriculture and the National Police's Food Task Force to strengthen oversight across Indonesia's palm oil supply chain.
The government estimates that roughly 15 million Indonesians depend on the palm oil sector for their livelihoods. Officials therefore want growers to be among the first beneficiaries whenever global CPO prices strengthen.
Earlier this month, the Ministry of Agriculture issued warnings to hundreds of companies that continued purchasing FFB below prevailing market prices. Together with the Food Task Force, authorities have been inspecting firms suspected of failing to comply with regional pricing mechanisms.
Initial results are now becoming visible across major palm oil-producing regions, where FFB prices have gradually moved closer to — and in several areas already matched — government benchmark prices, providing renewed optimism for smallholders after months of depressed returns.
"We want a healthy palm oil ecosystem where farmers prosper and companies also prosper. Most importantly, growers must not be disadvantaged. That is why monitoring will continue until prices stabilize and the benefits are felt by oil palm smallholders across Indonesia," Amran said.
With more companies adjusting their procurement prices and government oversight remaining in place, the ministry expects the recovery in FFB prices to spread more evenly across Indonesia's palm-growing regions, supporting both smallholder incomes and the long-term sustainability of the country's palm oil industry. (T2)
