Cooking oil producers off CPO supply list

JAKARTA (JP): Minister of Forestry and Plantations Sumahadi has appointed 14 refineries in Jakarta, Surabaya in East Java and Medan in North Sumatra to process crude palm oil (CPO) produced by state plantation companies PT Perkebunan Nusantara I through XIV.

The 14 refineries, however, did not include the three cooking oil producers which usually receive a monthly supply of about 39,200 tons of CPO from the state plantation companies.

"Olein produced by the appointed refineries will be used by Bulog to stabilize cooking oil prices in the domestic market," the minister said in one of his four directives.

An executive of a state cooking oil producer questioned the assignment of the 14 refineries, saying that the effect of the directives might well be a new monopoly for Bulog, the state logistics agency.

"PTPN (the 14 state plantation companies) have been asked to sell most of their CPO to the appointed refineries. The funny thing is that we, a state cooking oil producer cannot process CPO produced by state plantations," the executive who asked for anonymity said.

On Feb. 1 Bulog lost its monopolies on the distribution of all commodities except for rice under the economic reform program agreed with the IMF.

The refiners appointed to process the CPO from the 14 state plantation companies include those managed by the giant Salim Group, Sinar Mas Group, Musim Mas Group and Astra Group.

The directives sent to the board of directors of the State Joint Marketing Office (KPB) state that the refiners will be allocated between 3,000 and 20,000 tons of CPO every month.

"Why did the minister appoint those giant refiners which have their own supply of CPO from their plantations?," a trader who asked not to be named asked.

PTPN at present produces about 1.9 million tons of CPO every year or about 30 percent of the country's total CPO production.

The directives also said that the state plantation firms should not fulfill outstanding contracts and that any money that had been received would have to be returned to the producers who used to buy their CPO.

The directive was issued Wednesday, coinciding with the government's move to officially lift the export ban on palm oil and its derivatives.

Last December, the government forbade the export of CPO and its derivatives to ensure sufficient supply for domestic consumption and to stabilize domestic prices. (gis)