Farmers Applaud Palm Oil Mills for Adhering to Disbun Prices
The unified export policy for strategic natural resource commodities through Danantara Sumberdaya Indonesia (DSI) has raised concerns among oil palm farmers in North Sumatra. The concern emerged after fresh fruit bunch (FFB) prices plummeted to around Rp2,300 per kilogram, down from a previous high of Rp3,700/kg.
“Initially, prices were good, reaching Rp3,600 to Rp3,700 per kg. Now they’re only Rp2,300–2,500. Our situation is worsened by expensive fertiliser; NPK fertiliser has risen from Rp700,000 to Rp900,000 per sack,” said Wahyudin, a Langkat-based oil palm farmer, quoted on Saturday (30 May).
However, not all palm oil mills (PKS) are applying low purchase prices. Some continue to buy FFB from farmers at the legally mandated rates, unaffected by sentiment around the single-door export policy via DSI.
Mujahit, chairman of the Sumber Usaha Village Cooperative (KUD), explained via phone that his cooperative is a plasma partner of PT Rimba Mujur Mahkota (RMM), part of Artha Graha. He stated the company buys FFB based on prices set by the Mandailing Natal District Plantation Office (Disbun).
“We are grateful that PT RMM buys our FFB at high prices, in line with Disbun regulations. Farmers can feel more at ease, keeping up with high fertiliser and fuel costs,” Mujahit said.
The cooperative in Sikara-kara Village, Natal Subdistrict, also noted that its partnership with PT RMM as the core company is harmonious and mutually beneficial.
Deputy Agriculture Minister Sudaryono revealed 123 palm oil mills are still buying FFB below standard prices. Previously, the Ministry of Agriculture identified 139 PKS purchasing FFB below regulated rates. The government has praised mills that continue to pay farmers according to set prices.
The decline in FFB purchase prices became evident after the government announced the formation of DSI as the exporter of strategic commodities, including palm oil. Sudaryono stressed there is no valid reason for mills to suppress FFB prices, as international crude palm oil (CPO) prices remain strong.
Global CPO demand is also rising, yet domestic FFB prices are experiencing fluctuations and pressure. Sudaryono reiterated that DSI will not take additional profits in the palm oil supply chain.
“DSI does not take profits. It is merely a management and oversight company operating transparently and accountably,” Sudaryono said during a virtual press conference on Friday (29 May). (E-4)