Indonesia Seeks to Stabilize Farmer Palm Oil Prices Amid Export Policy Shift

Indonesia's government is actively seeking solutions to stabilize the volatile prices of fresh fruit bunches (FFB) for palm oil farmers. The recent price drop at the farmer level is seen as disconnected from strong global market demand and favorable international prices.

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This is good problem.

Following a meeting with industry stakeholders, including the National Food Agency, state-owned enterprises, and industry associations like GAPKI, the government expressed optimism. Deputy Agriculture Minister Sudaryono described the situation as a "good problem" that can be overcome. The core issue is perceived to stem from uncertainty in the trade chain following the implementation of a single-door export policy for natural resources.

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This is the world price, the purchase price is good, why is it bad at the farmer level? That's what we need to solve.

To address this, companies are urged to continue transactions normally, referencing the Indonesian State Treasury auction (KPBN) prices. The Agriculture Ministry previously identified 139 palm oil mills purchasing FFB below regional price regulations, with 16 already adjusting their prices after government intervention. Local governments are also tasked with strengthening oversight of FFB price determination regulations.

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The objective is not to make a profit, not at DSI, but the objective is to regulate. Those who are orderly continue, those who are not yet orderly are regulated.

The transition to a single-door export system, managed by PT Danantara Sumberdaya Indonesia (DSI), will occur from June 1 to August 31, 2026, before full implementation on January 1, 2027. DSI's role is to manage and oversee exports transparently and accountably, not to profit. The Indonesian Palm Oil Farmers Association (Apkasindo) welcomed the government's swift response, hoping for a return to normal FFB prices that would allow farmers to "smile again."

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We hope that after this announcement, the tender price at KPBN will not be withdrawn, and the FFB price can return to normal as before so that our farmer friends can smile again.