Agriculture Minister Amran Perplexed as Palm Oil Prices Plummet Despite Dollar Surging to Rp18,000
Jakarta, CNBC Indonesia - The Minister of Agriculture, Amran Sulrand Sulaiman, believes there is no justification for the decline in fresh fruit bunch (FFB) prices for palm oil, given the strengthening of global Crude Palm Oil (CPO) prices and the high exchange rate of the US dollar against the rupiah.
According to Amran, the current exchange rate, which is hovering around Rp18,000 per US dollar, should actually serve as a positive sentiment for Indonesia’s export commodities, including palm oil. Consequently, he questioned the drop in FFB prices that occurred following the announcement of the single-door export mechanism through PT Danantara Sumberdaya Indonesia (DSI).
“We are pleased to announce that today we have agreed that there will be no more decreases in FFB prices. They must return to their original levels. In fact, if necessary, they should rise even higher,” Amran stated during a press conference at the Ministry of Agriculture office in Jakarta on Monday (8/6/2026).
He emphasised that the weakening of the rupiah should provide additional benefits to export-oriented sectors. With the exchange rate difference having increased by approximately 10%, FFB prices at the farmer level should have been pushed upwards rather than moving in the opposite direction.
“This is an anomaly; at a time when prices should be rising, they are falling. Why? Because the dollar value has increased by 10%. Therefore, FFB prices must also rise; there is no reason for them to fall. We asked, and no one could provide an answer. We have now reached an agreement; all parties, including association heads, companies, entrepreneurs, and exporters, agree that prices must return to their previous levels,” he said.
He further estimated that FFB prices have the potential to increase higher than previous levels when considering the current exchange rate. “They should be 10% higher than before due to the exchange rate difference. With the dollar now at Rp18,000, we should use this momentum and opportunity to benefit the agricultural sector. Last year, our exports increased by Rp167 trillion,” Amran explained.
Nevertheless, Amran revealed that FFB prices are beginning to show signs of improvement. Based on reports received, approximately 70% of FFB prices have returned to the normal range of between Rp3,200 and Rp3,600 per kg, depending on the regulations applicable in each region according to Governor Regulations (Pergub).
He expressed hope that this recovery process would be fully realised starting today, accompanied by price increases that reflect the positive impact of the strengthening dollar on national export revenue.
As is known, according to Refinitiv data, as of 09:07 WIB, the rupiah had weakened to the level of Rp18,100/US.Thispositioncausedthe′Garuda′currencytodepreciatebyapproximately0.50 at the close of trading last Friday (5/6/2026).