RI Ombudsman member Yeka Hendra Fatika asked the government to ensure all cooking oil producers get palm oil (CPO) at domestic prices (Domestic Price Bonds). The trick is to integrate palm oil producers with cooking oil producers.
He reasoned that not all cooking oil producers get palm oil at domestic prices. This has resulted in the Regulation of the Minister of Trade Number 8 of 2022 concerning Export Policies and Regulations not having significant implications for the availability of cooking oil at the highest retail price.
“The method must be married between all these cooking oil producers with all CPO producers who have an obligation to set aside 20 percent of export volume,” Yeka explained online, Friday (25/6/2022).
Yeka added that the type of cooking oil that needs to be ensured is bulk cooking oil. Because this type is widely consumed by small and micro businesses and low-income households.
He reminded the government to immediately take short-term strategic steps so that HET cooking oil can be enjoyed by the community equally. Because the majority of Muslims will enter the month of Ramadan and Eid al-Fitr. The Ombudsman will also continue to monitor cooking oil prices until they are stable as determined by the government.
“Producers that produce bulk oil must be prioritized so that later in the market, the price of bulk oil is according to the HET, which is Rp. 11,500,” he added.
New Policy Adjustments
The President Director of the Palm Oil Plantation Fund Management Agency (BPDPKS), Eddy Abdurrachman, assessed the scarcity of cooking oil with HET because the market was in a period of adjustment to new government policies. As a result, a number of producers are still looking for raw materials that match domestic prices.
Therefore, he agrees with the Ombudsman who encourages the government to bring together palm oil producers with cooking oil. Especially exporters who have an obligation to meet 20 percent supply for the domestic market (Domestic Market Bonds /DMO).
In addition, he said, the government also needs to prepare a cooking oil supply chain at HET prices by involving parties who have experience in food distribution.
“For example, we can take advantage of SOEs such as Bulog, which already have experience in distributing food for the poor,” he added.
Eddy assessed that Indonesia’s total CPO production in 2021 will reach 46.88 million metric tons, 18.42 million metric tons of which are for domestic purposes. The details for cooking oil are 8.95 million metric tons and biodiesel 7.34 million metric tons for domestic use. The rest, exported CPO as much as 34.234 million metric tons.
Ministry of Trade Intensify Coordination with Local Governments
Trade Minister Muhammad Lutfi in a press statement said the ministry continues to communicate with local governments to ensure the smooth distribution of cooking oil. The coordination is to respond to the obstacles that occur in the community.
“We want to ensure that we can achieve a smooth supply of cooking oil together. For this reason, coordination with the regional trade offices is very important to ensure this effort is carried out properly,” Lutfi explained through a press statement, Thursday (24/2/2022).
The Ministry of Trade will also continue to operate the bulk and packaged cooking oil markets simultaneously in all provinces in Indonesia until Eid 2022. The Ministry of Trade has threatened to take firm action if it finds any hoarding of cooking oil.
Previously, the Ministry of Trade issued Minister of Trade Regulation Number 8 of 2022 concerning the Second Amendment to Minister of Trade Regulation Number 19 of 2021 concerning Export Policies and Regulations to impose DMO and DPO on crude palm oil, refined, bleached, and deodorized palm olein and used cooking oil. Exporters are required to supply 20 percent of the export volume of CPO and derivative products for the domestic market. Meanwhile, the DPO price for CPO is Rp 9,300 per kilogram and for olein Rp 10,300 per kilogram. [sm/em]