Olein exports continue despite lack of supply

JAKARTA (JP): Exports of olein, the main raw material of cooking oil, from Jakarta continues despite the shortage of cooking oil supply in the capital, a source said.

A Medan-based producer said Saturday that he suspected that the exported olein originated from North Sumatra, after it was shipped to Jakarta to help the government's effort to stabilize cooking oil prices.

He said the government asked crude palm oil (CPO) producers in North Sumatra to sell some of their products to Jakarta instead of to overseas in a bid to help stabilize cooking oil prices.

"We have no problem selling part of our CPO to Java but the government should assure that our products are not exported," he told The Jakarta Post.

A source said that 11,000 tons of olein had been allegedly exported by PT Darmex of Duta Palma Nusantara Group from Tanjung Priok to Malaysia in four shipments over the past two months.

The company last exported 3,300 tons of olein from Tanjung Priok to Malaysia on June 23 on a Deli Tua III barge, according to data obtained by the source.

The government has appointed state trading company PT Dharma Niaga to distribute cooking oil to stabilize market prices in Jakarta which rose to above Rp 6,500 over the past several weeks, compared to the floor price of Rp 3,500 set by the government.

The government-sponsored Joint Marketing Office (KPB), which handles the marketing of farm products produced by state-owned plantation companies, has been asked by the government to supply Dharma Niaga with enough stock for that purpose.

However, cooking oil prices remained high last week. This was because it did not receive enough cooking oil from KPB, Dharma Niaga's director Sonda Lawa said.

He said the company had received only 4,500 tons of cooking oil from KPB since its appointment as market price stabilizer recently.

KPB's director Asep A Tojib said it would only increase supply if Dharma Niaga gave it an estimated daily demand for Jakarta.

Earlier, an anonymous official at KPB said the effort to stabilize cooking oil prices on the domestic market would only be successful if the private sector helped out by reducing their exports.

He said many private producers sold their CPO products overseas despite the 40 percent export tax.

The official named several big producers, including PT Darmex, PD Kemajuan, Inti Boga Sejahtera of the Salim Group, SMART of the Sinar Mas Group, Asean Agro and Hasil Kesatuan, as companies which still preferred to sell their produce overseas.

He said the international price of CPO was currently much higher than domestic prices, a fact that prompted many companies to export their produce despite the high export tax. (jsk)