"We ask the government that the PE be lowered or temporarily removed, so that these farmers` FFBs can get reasonable prices," House Commission VI member Eriko Sotarduga stated in Jakarta on Monday.
According to him, if the PE is lowered or temporarily removed, it will encourage businessmen and exporters to immediately ship CPO to export destination countries.
So far, many entrepreneurs still hold their CPO in stockpiling tanks because international prices are still low, at around US$ 500 per ton, he noted.
With that price, according to Sotarduga, the price of FFB at the farm level should still be around Rp1.3 thousand per kilogram (kg), or around 18-20 percent of the price per kg of international CPO.
Therefore, he added, in response to the drop in FFB prices, there must be a good synergy between the government, entrepreneurs, and farmer associations.
In addition, there needs to be collaboration between the Ministry of Trade (Ministry of Trade), Ministry of Agriculture (Ministry of Agriculture), Ministry of Industry (Ministry of Industry), and Ministry of Foreign Affairs (Ministry of Foreign Affairs) in order to open new export markets.
In addition, the Ministry of Foreign Affairs, through its foreign embassies, must intensely open new markets, because so far, Indonesia still relies on traditional export markets, such as China, India, and Pakistan. Markets in the Middle East and Africa are potential markets to enter.
Deputy Secretary General of the Indonesian Palm Oil Farmers Association (Apkasindo) Rino Afrino revealed that the price of FFB in palm oil mills (PKS) in Sumatra is between Rp750 and Rp1,050 per kilogram. Meanwhile, prices in Central Kalimantan (Central Kalimantan) and West Kalimantan are lower than the prices of FFB in Sumatra.
FFB prices in Sulawesi and Papua Island are only Rp500 to Rp700 per kilogram, he noted, even though the cost of managing FFB issued by farmers, which consists of maintenance, fertilization, and harvest costs, is around Rp800 to Rp900 per kilogram.
"This means, if the farmer sells FFB below Rp800 per kilogram, then that is selling losses," Afrino remarked.
He explained that the decline in the price of FFB at the farmer level had been going on since last June.
"At the beginning of the decline in FFB prices, farmers did not feel it. But at the current price, we all reacted. Therefore, we ask the government to immediately intervene to save the price of FFB for farmers," he pointed out.
On Tuesday (Nov 13), Apkasindo sent a letter to the Coordinating Minister for Economic Affairs Darmin Nasution. In the letter, Apkasindo requested for a reduction in export levy rates because the palm oil tank was very full. The impact is reducing the purchase of FFB for farmers.
"Hence, export levy rates should be temporarily reduced, so that exports increase. Then, the prices of CPO and FFB can be raised again," Afrino elaborated.
In the Regulation of the Minister of Finance (PMK) No. 114 of 2015 concerning Public Service Agency Service Rates, Palm Oil Plantation Fund Management Agency (BPDP-KS) sets export tariffs on CPO and CPKO at $50 per ton.
Meanwhile, RBD (refined, bleached and deodorized) Palm Olein is $30 per ton, RBD palm oil and PKO are $20 per ton, cake and palm residue are $20 per ton, and palm kernel shells are $10 per ton.
According to him, ideally, the reduction in export levy rates is divided and still provides space for the development of downstream industries.
For example, the CPO export levy rate becomes $30 per ton, RBD Palm Olein becomes $10 per ton, and packaged products are exempt from export levies.
Reporting by Subagyo
Editing by Eliswan, Suharto
Reporter: antara
Editor: Heru Purwanto
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