Jokowi Will Ban CPO and Cooking Oil Exports

palm oil trees

After a meeting with his ministers, the President of Indonesia, Joko Widodo, will officially ban the export of raw materials for cooking oil (CPO) and cooking oil. The rules will take effect on Thursday, April 28, 2022.

The export ban, according to Jokowi, is carried out so that the domestic supply of cooking oil is abundant and the price is cheap.

“In the meeting, I decided to ban the export of raw materials for cooking oil and cooking oil starting Thursday, April 28, 2022, until the specified time limit,” he said Friday (22/4).

Previously, the price of oil shot up in August 2021 from the initial only Rp. 14 thousand per liter to Rp. 20 thousand. To overcome this spike in cooking oil prices, the government has actually issued many policies.

Some of the policies include:
First, launch simple packaged cooking oil of Rp. 14 thousand per liter in retail and traditional markets in stages from January to June 2022. The total cooking oil disbursed is Rp. 2.4 billion liters.

To provide this cooking oil, the government disbursed a subsidy of Rp. 7.6 trillion which was taken from the palm oil plantation fund

Second, implementing an obligation for producers to supply domestic cooking oil (DMO) of 20 percent of their total export volume at domestic prices (DPO) starting January 27 last. With this policy, the highest retail price is set at three.

That is; bulk cooking oil Rp. 11,500 per liter, simple packaged cooking oil Rp. 13,500 per liter, packaged cooking oil Rp. 14 thousand per liter. Prices take effect on February 1, 2022.

Even though the government has tried its best to control the price of cooking oil, the opposite has happened; a new problem arose.

For a one-price policy of Rp. 14 thousand, Director General of Domestic Trade at the Ministry of Trade, Oke Nurwan, said that the policy made people attack cooking oil in retail.

As a result, cooking oil becomes scarce in the market. Even so with the DMO and DPO policies.

Because it was not effective, the government then issued a new policy; revoke the highest retail price of premium cooking oil and submit the price to the market mechanism and raise the highest retail price of bulk cooking oil to Rp. 14 thousand per liter.

After the policy was issued, the price of packaged cooking oil shot up to around Rp. 25 thousand per liter. The same goes for bulk cooking oil. Although the HET has been set at Rp. 14 thousand per kg, until now the price of bulk cooking oil is still above Rp. 22 thousand per liter.

Amid the unfinished cooking oil problem, a new problem arose; corruption of crude palm oil export financing facilities. The case of alleged corruption was revealed by the Attorney General’s Office.

They have arrested four suspects in connection with the case. The four suspects are the Director-General of Foreign Trade (Daglu) of the Ministry of Trade with the initials IWW, the Commissioner of PT Wilmar Nabati Indonesia with the initials MPT, General Affairs of PT Musim Mas with the initials PT, and the Senior Manager for Corporate Affairs of the Permata Hijau Group (PHG) with the initials SMA.

Attorney General ST Burhanuddin said the suspects were detained based on a warrant for the Detention of the Director of Investigation at the AGO.