Business Group Warns of Export Hurdles Under Single-Door Palm Oil Scheme

The Indonesian Palm Oil Association (GAPKI) has voiced concerns regarding potential bottlenecks in the implementation of a new single-door export policy for natural resources, managed by PT Danantara Sumberdaya Indonesia (DSI). Eddy Martono, Chairman of GAPKI, highlighted that the palm oil business necessitates swift decision-making, as global prices for palm oil fluctuate rapidly.

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In any business, decisions must be fast. This requires quick decisions.

Martono clarified that GAPKI does not oppose the government's policy but seeks to act as a strategic partner. The association is requesting that the transition mechanism for the single-door export system be discussed collaboratively with industry players to prevent market uncertainty. "In any business, decisions must be fast. This requires quick decisions," Martono stated.

He explained that palm oil prices can change within hours, making it crucial for exporters to have certainty regarding who makes transaction decisions and determines export prices. Delays in the transaction process could ultimately harm all parties involved. Martono cited an example where a delayed decision during a price surge could lead to losses if prices drop the following day.

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If DSI takes too long, a deal made now might result in losses if the price drops tomorrow.

GAPKI noted that businesses and importers were surprised by the Presidential Regulation establishing the single-door export policy for natural resources. The association also feels the palm oil industry was not sufficiently involved in the initial discussions, contributing to market uncertainty. This lack of clarity has reportedly caused importers to withhold purchases, consequently pressuring crude palm oil (CPO) prices in the domestic market.

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The market needs certainty. The market needs clear information.

Martono pointed out that the complexity of Indonesia's palm oil export market, which reaches over 160 countries, differs from other commodities. Importer needs are highly diverse, especially since approximately 90 percent of Indonesian palm oil exports are in the form of downstream products. GAPKI questions the readiness of the new scheme if all export support is consolidated under PT DSI by 2027, fearing that it could disrupt established market networks built over long periods and potentially lead to a loss of market share. The association also warned that importers could easily switch to other producers or substitute vegetable oils if Indonesian supply becomes difficult to access.

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Don't let this hinder us and cause us to lose our market.