Palm Oil Boss Responds to Export-Dedicated State-Owned Enterprise, Warns of This Problem

Jakarta, CNBC Indonesia - Eddy Martono, chairman of the Indonesian Palm Oil Producers Association (GAPKI), has responded to the latest export policy announced by President Prabowo Subianto during his address at the 19th Plenary Session of the DPR RI concerning the KEM and PPKF RAPBN 2027, held at the Nusantara Building of the MPR/DPR/DPD RI in Jakarta on Wednesday, 20 May 2026.

The policy involves issuing a new Government Regulation (PP) and the creation of a new State-Owned Enterprise (BUMN) dedicated to exporting commodities. According to Prabowo, under the new PP all sales of all natural resource outputs, from palm oil and coal to ferroalloys, must pass through the government-appointed BUMN.

The new BUMN is named PT Danantara Sumber Daya Indonesia. Eddy warned that the rule could backfire, potentially eroding export markets for palm oil and its derivatives and reducing Indonesian production. He cited the nature of the palm oil industry and its supply chain in Indonesia as a reason.

“Not all exporters are plantation companies with downstream industries. Many are trading companies serving relatively small volumes to certain countries. With a state entity, what will happen to such firms?” Eddy told CNBC Indonesia on Wednesday, 20 May 2026. “The same industry does not necessarily have identical orders. Will such a system be able to accommodate this?” he added. “Exporters usually have their own markets. We must not lose markets if it cannot be managed properly,” he said.

Meanwhile, in his speech, Prabowo argued that this new governance policy for natural resource exports is not extraordinary, as it has been implemented by many countries. “The main aim of this policy is to strengthen supervision and monitoring, and to root out under-invoicing, transfer pricing, and the leakage of export earnings (DHE),” he said. “This policy will optimise tax and state revenue from processing our natural resources. It could be like Mexico, the Philippines, and our neighbouring countries. We do not want our revenue to be the lowest because we are not bold enough to manage our own assets owned by the Indonesian nation,” he asserted.