POPSI emphasises export transparency for natural resources to protect palm oil farmers
In the palm oil trade chain, any additional costs arising at the export level are generally passed down through the supply chain, eventually affecting the price of fresh fruit bunches (FFB) received by farmers.
The Indonesian Palm Oil Farmers Organisation (POPSI) has emphasised the importance of transparency regarding Government Regulation Number 24 of 2026 on the Export Management of Strategic Natural Resource Commodities to ensure that farmers of commodities such as palm oil remain protected.
Speaking in Jakarta on Saturday, the General Chairman of POPSI, Mansuetus Darto, highlighted the need for transparency, particularly concerning price calculations, monitoring mechanisms, and farmer protection schemes, before the policy is fully implemented.
“In the palm oil trade chain, every additional cost that arises at the export level is generally passed down through the supply and affects the price of fresh fruit bunches (FFB) received by farmers,” said Darto.
The government has established PT Danantara Sumber Daya Indonesia (DSI) as a State-Owned Enterprise (SOE) created to improve the export governance of national strategic commodities. DSI is tasked with managing and supervising export transactions for several important natural resource commodities, including coal, crude palm oil (CPO), and ferroalloy.
The formation of DSI is an effort by the government to close potential state losses that have occurred in export trade due to practices such as under-invoicing and transfer pricing.
“If the margin taken by the export SOE becomes a new cost component in trade, then the greatest risk may be borne by farmers through a decrease in FFB prices. Therefore, the government needs to ensure that this policy does not create an additional burden for palm oil farmers,” DHM Darto stated.
Furthermore, Article 4 of PP 24/2026 regulates that the obligation to export through export SOEs may be exempted for businesses that have contracts or agreements with the government containing provisions for investment, divestment, and/or domestic processing/refining.
“POPSI’s assessment of Article 4 is that, while the government claims to want to address under-invoicing, on the other hand, the regulation opens an exemption mechanism decided through ministerial coordination meetings, which could create loopholes for lobbying and cause business uncertainty,” said Darto.
He added that it is vital for regulators to explain, in measurable terms, how much additional foreign exchange the government expects to gain from the implementation of this single-door export scheme.
“If the primary reason for this policy is to save the country’s foreign exchange, then the government needs to communicate the targets, the mechanism for achievement, and the benefits that will be received by the community, including palm oil farmers,” he concluded.