CPO imports will continue: Beddu
JAKARTA (JP): The National Logistics Agency (Bulog) has pledged to continue importing crude palm oil (CPO) to stabilize domestic cooking oil prices.
Beddu Amang, Bulog's head, said the agency would keep importing olein, which costs Rp 150 a kilogram more overseas than on local markets, although this would amount to a significant subsidy.
He said the agency lost about Rp 15 billion (US$6.4 million) a year to stabilize cooking oil prices.
"We have successfully stabilized the price of local crude palm oil in the past three years," Beddu said recently as quoted by Bisnis Indonesia daily.
The agency keeps buffer stocks to control prices of important commodities such as rice, sugar and cooking oil.
The agency imports olein, cooking oils or even CPO to stabilize local cooking oil prices.
Indonesia is a major CPO producer, but most locally produced CPO is exported because overseas prices are higher.
The agency also buys CPO from state-owned palm oil producers. The CPO is processed at local refineries under a cooperation scheme before being sold directly to local markets.
The agency's data shows that it now holds 44,505 tons of olien stock.
The agency said it would import about 12,000 tons of olien and buy 11,000 tons locally this month, raising its stock to about 68,000 tons.
On the government's proposal to establish a futures commodity exchange, Beddu said he fully supported the plan to include CPO in futures trading.
He said that trading CPO futures could raise the commodity's sales value and export volume, which would raise the income of farmers, producers and exporters.
"CPO can be traded on the futures exchange as well, although only agricultural products are commonly traded on futures exchanges," he said.
The House of Representatives is deliberating the government- sponsored bill on the futures commodities exchange.
CPO exports rose last year as a government regulation, which imposed an export tax on CPO producers, was temporarily dropped.
The export tax is automatically dropped if prices on the world market fall below $434 a ton for CPO and below $500 a ton for olein and cooking oil. (02)