Deputy Agriculture Minister Praises Palm Oil Mills for Buying Farmers' TBS at Government-Set Prices

Falling prices for palm oil fresh fruit bunches (TBS) have persisted since the government established PT Danantara Sumberdaya Indonesia (DSI) as the strategic commodity exporter, including palm oil. Deputy Minister of Agriculture Sudaryono stated that out of 139 palm oil mills (PKS) purchasing TBS below the set price, 123 are still found to be doing so. He stressed there is no justification for mills to lower purchase prices, as global crude palm oil (CPO) prices are strong and rising, contrasting with volatile domestic TBS prices. Therefore, Sudaryono affirmed that DSI will not become a new rent-seeker in the palm oil supply chain and praised mills adhering to government-set prices. ‘PT DSI does not take profit; it is merely a management and oversight company operating transparently and accountably,’ he said on 30 May 2026. However, a palm oil farmer in Langkat, North Sumatra, Wahyudin acknowledged that the single-channel export policy for strategic natural resources through DSI has caused TBS prices to plummet to Rp2,300 per kg from a previous high of Rp3,700. ‘Prices were previously good, reaching Rp3,600 to 3,700 per kg. Now they are only valued at Rp2,300 to 2,500 per kg. Our situation is worsened by high fertiliser costs, such as NPK, which has risen from Rp700,000 to Rp900,000 per sack,’ he said. Not all palm oil mills are purchasing TBS at low prices, with several mills not psychologically affected by the single-channel export policy for strategic commodities via DSI. KUD Sumber Usaha chairman Mujahit said the cooperative, as a plasma partner of PT Rimba Mujur Mahkota (part of Artha Graha), buys farmers’ TBS in line with Mandailing Natal Regency Plantation Office regulations. ‘We are grateful PT RMM buys our TBS at high prices, in line with Disbun rules. Farmers can feel more secure and offset high fertiliser and fuel costs,’ he added.