Dollar Strengthens, Palm Oil Prices Drop; Agriculture Minister Cites Anomaly
The Minister of Agriculture, Andi Amran Sulaiman, has described the recent decline in fresh fruit bunch (FFB) prices for palm oil as an anomaly. This is because FFB prices have dropped even as the Rupiah weakens against the US Dollar and global crude palm oil (CPO) prices remain on a strong trend.
Amran stated that the government has held meetings with palm oil associations, farmers, exporters, the National Police Food Task Force, and the Special Criminal Investigation Directorate (Dirkegrimsus) across 25 provinces. These meetings resulted in an agreement to return FFB prices to levels consistent with market conditions.
“There is an anomaly occurring; at this time, prices should be rising, not falling. Why? Because the dollar value has a 10 per cent difference. Therefore, prices must rise. There is no reason for them to fall,” Amran said in Jakarta on Monday (8/6/2026).
According to Amran, the weakening of the Rupiah to the level of Rp18,000 per US Dollar should provide greater benefits for export commodities, including palm oil. This condition should lead to an increase in the FFB prices received by farmers. Amran noted that all parties present at the meeting agreed that FFB prices must return to their previous levels and must not continue to decline.
“Today we can say, Alhamdulillah, we have agreed that there will be no more price drops. They must rise to their original condition. In fact, if necessary, they should rise even higher,” Amran added.
The Ministry of Agriculture noted that approximately 270 to 300 palm oil companies have yet to adjust their FFB purchase prices. Out of around 1,900 palm oil companies operating in Indonesia, these specific companies will become the focus of government supervision. Data regarding companies that have failed to raise prices will be submitted to the police for follow-up. The government has requested inspections to determine why FFB prices have not returned to appropriate levels.
Brigadier General Ade Safri Simanjuntak, Head of the National Police Food Task Force, stated that irregularities were found in the decline of FFB prices. He noted that FFB prices at the farmer level are weakening even though global CPO prices have not decreased and are tending to increase. Consequently, the Food Task Force suspects indications of price-fixing. To investigate these allegations, the National Police will collaborate with the Business Competition Supervisory Commission (KPPU).
“We suspect there are indications of a cartel or malicious conspiracy, a secret agreement made to ensure FFB prices drop while global CPO prices are not falling or are tending to rise,” said Ade. He added that the police and KPPU will conduct an investigation into the suspected cartel, and law enforcement will be pursued if violations are found.
Meanwhile, Amran revealed that approximately 70 per cent of FFB prices are reported to have begun recovering. The government aims for a full recovery in the near future so that farmers can once again enjoy the benefits of high palm oil export values. “We must protect our farmers. According to our data, there are 15 million farmers. We must not allow them to suffer losses,” Amran concluded.