GAPKI: Uncertainty Over Single-Door Export Policy Pressures CPO and Palm Oil FFB Prices
The Chairman of the Indonesian Palm Oil Association (GAPKI), Eddy Martono, has stated that the recent decline in fresh fruit bunch (FFB) prices is inseparable from the market uncertainty arising from the proposed single-door export policy. This condition has led to a weakening of crude palm oil (CPO) prices, which directly impacts FFB prices at the farmer level.
According to Eddy, the uncertainty triggered by the announcement of the single-door export policy has affected market sentiment and disrupted the price formation process in auction markets. “It has been explained that this is an issue of uncertainty. When the single-door export policy was announced, it affected the market. As a result, price formation did not occur at the KPBN, causing CPO prices to drop. When CPO prices fall, FFB prices automatically follow,” Eddy said on Monday.
However, he emphasised that palm oil farmers partnering with GAPKI member companies are relatively more protected from price volatility. This is because FFB price determination is conducted in accordance with the provisions of Minister of Agriculture Regulation Number 13 of 2024, involving local governments, cooperatives or farmer groups, and companies.
Eddy explained that this mechanism ensures the prices received by farmers are fairer and not directly influenced by daily market fluctuations. “All GAPKI members partner using Minister of Agriculture Regulation Number 13 of 2024. In price determination, it is set by local governments, farmer cooperatives or groups, and companies. Therefore, the price is very fair,” he stated.
He added that when market FFB prices decline, the prices received by partner farmers tend to remain more stable because they follow agreed-upon price determination periods in each region. “When FFB prices drop, the prices received by partner farmers actually tend to hold steady. Because each region has a different mechanism, some set prices that are valid for two weeks and some for one month,” he concluded.