JAKARTA – The Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono said that the fund managed by the Oil Palm Plantation Fund Management Board (BPDPKS) to pay incentives for the price spread between the market index price of biodiesel and diesel fuel has contributed in stabilizing the price of crude palm oil (CPO).
“Actually, BPDPKS acts as a paymaster. It plays an important role as local demand for palm oil has been continually rising due to several factors, which include the biodiesel production and consumption. The biodiesel mandatory program has maintained the price of palm oil,” Eddy Martono told ANTARA in Jakarta on Friday (15/12).
Eddy said that the government’s policy to use palm oil as feedstock for production of biodiesel is the right strategy to stabilize the price of crude palm oil (CPO) amid the palm oil export ban. The ban had resulted in abundance of fresh fruit bunches (FFB) so that palm oil mills could not accommodate them. But the biodiesel production program, which is fed with CPO as raw material, managed to arrest the price declining trend at moderate level and then slowly push it up higher.
According to Gapki, when CPO export ban imposed at the end of April 2022, the price of FFB dropped from Rp3,500 per kg to Rp1,500 – 1,800 per kg. Eddy said that at that time not only smallholders cried out for help, but also the oil palm companies. But then the implementation of the biodiesel mandatory program managed to reverse the downward trend to an upward direction until reaching around Rp2,300 – 2,500 per kg.
“Besides a paymaster, BPDPKS also functions to collect fund based on the percentage of export levy paid by oil palm companies. Then they pay based on the prevailing regulations. So far, we see no problem regarding the payment. As long as all are in compliance with regulations, they will pay,” said Eddy.
The Association of Indonesian Oil Palm Smallholders’ (Apkasindo) Chairman Gulat ME Manurung concurred with Eddy Martono, saying that BPDPKS can play an important role in pushing the smallholders to increase their productivity and in accelerating the down-streaming process of palm oil industry. He said that the less CPO available at the global market, the higher will be the price of CPO and the FFB.
“Indonesia is the world’s largest producer and consumer of palm oil. And biodiesel is the key factor in driving up the local consumption of CPO as the feedstock for biodiesel production,” said Gulat. (*)
Source: REPUBLIKA.CO.ID
