Good news! Luhut wants to make CPO prices skyrocket again

Jakarta, CNBC Indonesia – Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut B Pandjaitan the government will boost the absorption of palm oil in the country. Namely, by increasing the application of palm oil consumption for fuel, biodiesel from B30 to B35/B40.

According to Luhut, this step could be a way to boost the price of crude palm oil (CPO) which is expected to save the price of fresh fruit bunches (FFB) for smallholders. Where, he added, the government is trying to find a balance between targets from upstream to downstream related to cooking oil control which is carried out through various policies.

Luhut said the government will try to increase the price of CPO in the second semester, by increasing B30 to B35/B40 and applying it flexibly depending on the supply and price of CPO.

Luhut asked the Ministry of Energy and Mineral Resources, BPDP-KS, and Pertamina to immediately review the plan so that prices can be controlled. Thus, the issue of cooking oil prices can be immediately controlled and profitable for the community, farmers, and entrepreneurs.

“I hope that all relevant ministries and institutions can immediately follow up on work related to this issue, so that cooking oil prices can be immediately controlled and profitable for the community, farmers and entrepreneurs,” he said in a written statement, Saturday (2/7/2022).

In addition, he continued, the government will also accelerate the realization of exports because the capacity of the tanks will soon be full again. In addition, this is also done considering the low price of FFB on the farmer’s side.

Photo: ESDM’s B40 development laboratory. (CNBC Indonesia/Andrean Kristianto)
MEMR’s B40 development laboratory. (CNBC Indonesia/Andrean Kristianto)

“I ask the Ministry of Trade to be able to increase the export multiplier to 7 times for exports since July 1 with the main aim of increasing the price of FFB significantly to farmers,” he said.

In June, the government has allocated 3.41 million tons of exports through the transition and acceleration program. This allocation is given to provide certainty to the business world to export, and specifically for the transition program it can be used for the next few months.

By the end of June, the total bulk cooking oil distributed as part of the DMO for cooking oil producers had reached more than 270 thousand tons. Export allocation from the DMO program can also be used for 6 months, and part of it has been converted into export rights.

“To accelerate packaged cooking oil, it is necessary to provide attractive incentives for producers, so that they can move faster and delivery is also easier because they can use ordinary distribution channels such as container ships, not having to use bulk ships,” he concluded.

[Gambas:Video CNBC]

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