Govt rejects palm oil brokerage offer

Govt rejects palm oil brokerage offer

JAKARTA (JP): The Ministry of Agriculture has rejected an
offer made by a private firm to become an intermediary in the
marketing of crude palm oil (CPO) produced by state owned firms.

"There is no reason for a private firm to become a broker to
market CPO produced by state companies," Minister of Agriculture
Sjarifudin Baharsjah was quoted Saturday as saying.

"State-owned plantation companies are already using the
services of the state-run Joint Marketing Board for Estates
Products," he said.

The minister was reacting to a recent report that PT Arbamass
Multi Invesco, which is controlled by a grandson of President
Soeharto, is trying to mediate all CPO exports produced by state
estates.

Bisnis Indonesia also quoted an unidentified source as saying
that Arbamass is subsequently planning to transfer the CPOs to
another commodity broker in Singapore before releasing the
products into the world market.

Figures from the Federation of Indonesian Producers of Edible
Oils and Fats show that Indonesia's CPO production this year will
likely increase to 4.68 million tons from 4.18 million tons last
year.

The data also shows that in 1993, out of Indonesia's 1.63
million hectares of palm oil estates, about 24.53 percent or
401,994 hectares are controlled by state-owned plantation firms.
The total volume of CPOs produced by the 401,994 hectares of
state-owned palm oil plantation firms, however, is not clear.

Analysts said that CPO prices on the international market this
year will likely reach US$450 per ton, as compared to $700 last
year. Despite the decrease, this year's prices will still be
higher than the 1993 level of around $300 per ton.

Affiliate

Sjarifudin said that state-owned CPO producers generally have
affiliated marketing firms located in export destinations,
including PT Indoham in Hamburg of Germany and PTP Commodities in
New York.

"Basically we do not need any marketing intervention. If
private producers want to use Arbamass, they are free to do so,"
he said.

None of Arbamass's executives were available for comment on
Saturday.

Arbamass became the center of media attention recently when it
began advocating, in cooperation with regional authorities, the
control of the marketing of domestic liquor by virtually forcing
producers and distributors to buy stickers prior to sales.

This move is strongly opposed by liquor producers, including
brewers who are publicly listed and partially foreign owned.

A senior official of the Ministry of Home Affairs has already
denied Arbamass's claim that the firm's labeling ambition was
approved by the ministry. (hdj)