Indonesia orders palm oil prices to return to previous levels

Indonesian Minister of Agriculture Andi Amran Sulaiman has directed that the price of fresh fruit bunches (TBS) for palm oil must revert to levels seen before a recent decline. The government also plans to scrutinize around 300 companies that have failed to align their pricing with current market conditions.

Sulaiman announced this decision following a meeting with palm oil associations, farmer representatives, the National Police's Food Task Force, and the Directorate of Special Criminal Investigation from 25 provinces. He argued that the decrease in TBS prices is inconsistent with the commodity's market performance and the exchange rate, which have favored exports.

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Alhamdulillah, today it was agreed that there will be no more price drops. It must rise to the original condition. Even if possible, it should rise higher.

"Alhamdulillah, today it was agreed that there will be no more price drops. It must rise to the original condition. Even if possible, it should rise higher," the Minister stated at a press conference in Jakarta on Monday, June 8, 2026. He emphasized that the depreciation of the rupiah by approximately 10 percent against the US dollar should be a catalyst for higher TBS prices, leaving companies no justification for lowering their purchase prices from farmers.

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This is an anomaly at this time when prices should be rising, not falling. Why? Because the dollar exchange rate is 10 percent different. Yes, it must rise. There is no reason to fall.

Sulaiman stressed the government's commitment to protecting the estimated 15 million palm oil farmers across Indonesia, calling the recent price drop an "anomaly." He noted that out of roughly 1,900 companies in the palm oil sector, about 300 have not yet restored TBS prices to their previous levels. This data will be handed over to the police for further action.

Furthermore, the Minister clarified that TBS prices in each region must adhere to the rates set by local governments through gubernatorial regulations. Whether the established price was Rp3,200 or Rp3,600 per kilogram, companies must follow these provincial decrees. Sulaiman reported that approximately 70 percent of TBS prices have shown signs of recovery, with the government aiming for a full return to normal levels soon.

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If it was 3,200 it should remain 3,200. If it was 3,600, it should return to 3,600 based on the region. But it must follow the governor's regulation.