Apaksindo: FFB Price Reference Is Not Proportional: Cheaper FFB

Apaksindo: FFB Price Reference Is Not Proportional: Cheaper FFB

InfoSAWIT, JAKARTA – To protect the smallholders and get normal fresh fruit bunch (FFB) price, the government through Ministry of Agriculture published the Regulation of Minister of Agriculture (FMA) Number 1 / 2018.

The regulation regulated that to calculate FFB, crude palm oil (CPO) price which becomes the reference is not the reference price from Ministry of Trade but from CPO tender which was from PT Kharisma Pemasaran Bersama Nusantara (KPBN) that conducted auction produced by PT Perkebuan Nusantara (PTPN I to XIV). It is predicted, the production auction could be reaching 2,3 million tons per year or about 5% of the total CPO production nationally which reached 50 million tons.

“The process of tender/auction was joined by many companies did, such from, refinery, downstream products, trader, or exporter,” Chairman of Asosiasi Petani Kelapa Sawit Indonesia (Apkasindo), Gulat Manurung said, as in the official statement to InfoSAWIT, Thursday (14/7/2022).

He thought, the price result from the auction at KPBN should be the calculation reference to decided FFB price produced by the smallholders, and in mills in Indonesia which could be reaching 1.118 mills when purchasing smallholders’ FFB every day.

In normative, seeing from CPO price at KPBN in July, it is Rp. 7.305/Kg. The calculation is that FFB should be sold at about Rp.1.460/kg with the assumption, the yield reaching 20%.

He thought, if CPO reference price is based on the reference price published by Ministry of Trade, and after minus by tax, levy, and flush out ($1.615 - $688 = $927/ton CPO or Rp.13.625/kg of CPO), the smallholders’ FFB should be sold at Rp. 2.725/kg TBS (the range reaches Rp.1.265/kg FFB).

“From the price comparison, FFB price at KPBN and price reference by Ministry of Trade to decide smallholders’ FFB price, it described that the tender process at KPBN is not competitive and not proportional. CPO price from the tender at KPBN is much cheaper than the price reference by Ministry of Trade. This impacts the cheap smallholders’ FFB. That is why the suggestion delivered by Minister of Trade and Minister of Agriculture to purchase smallholders’ FFB is ignored,” he said.

Based on the complaint post of Apkasindo and many coordinators of Apkasindo in Indonesia, the smallholders are in misery because their FFB sold in the mills is only about Rp. 800/kg for the independent smallholders and Rp. 1.200/kg for the plasma ones. “It is much cheaper if they sold it to middlemen which could be at about Rp.300- 600/kg TBS,” he said.

The production cost is about Rp.1.850 - Rp.2.250/kg, It was Rp. 1.200/kg in last semester. The increasing production costs happened for the increasing infrastructure costs, such as, fertilizers, herbicides which increased more than 300%. “The fertilizer price is uncontrolled. There is no policy from the related ministry to control the price. Fertilizers covered 60% of the total FFB production costs,” he said. (T2)