Palm Oil Farmers' Association Criticises PT DSI Over Supply Chain Concerns

JAKARTA - Smallholder palm oil farmers are concerned that the establishment of PT Danantara Sumberdaya Indonesia (DSI), a commodity export body, could exert pressure on fresh fruit bunch (TBS) prices.

This is because DSI is seen as adding to the supply chain burden that will ultimately be borne by smallholders.

POPSI (Perhimpunan Organisasi Petani Sawit Indonesia) Chairman Mansuetus Darto explained that the palm oil industry has an interdependent supply chain involving farmers, middlemen, rampt, palm oil mills (PKS), refineries, and exporters.

In other words, farmers cannot directly deliver their harvest to mills as these typically accept large quantities of TBS.

Farmers also lack large vehicles to transport their harvest to distant mills.

‘Every level in the chain takes a margin,’ he said during an interview at Kompas.com office on Tuesday, 26 May 2026.

He added that the introduction of DSI into the export supply chain is feared to take an additional margin, further squeezing TBS prices for farmers.

‘While I say this isn’t a margin, but for the state as national revenue, that’s acceptable. But in what form? Export duties and levies,’ he explained.

Darto stated that palm oil price pressures are also felt by farmers from previous policies such as Domestic Market Obligation (DMO) and Domestic Price Obligation (DPO).

‘The margins in palm oil, at the upstream level, are small. Middlemen take Rp 50, the rampt take Rp 20. If DSI takes another upstream margin, it adds to the farmers’ burden,’ he said.

Regarding downstream supply chain, there are many risks for an export company, including failed exports and managing Letters of Credit (LC).

Darto said DSI must be prepared to handle all financial infrastructure and ecosystems.

‘So does DSI have to take on the risks currently borne by traders?’