Palm Cooking Oil Governance Should be from The Upstream (Sector)

Palm Cooking Oil Governance Should be from The Upstream (Sector)

InfoSAWIT, JAKARTA - KPPU claimed that palm cooking oil issues have been studied since September 2021 when KPPU noticed a cartel signal because the expensive palm cooking oil took place in the same time (by the producers) though they had different sources of material.

The vertical integration, oligopoly market structure and market concentration level which reached 50% became the signals for KPPU to divert its study to investigation process since 27 January 2022. KPPU also delivered suggestion and consideration to the government in the early of this year, which one of the points was the same with what the government did – the government should confirm palm cooking oil stock from the levels of producer, distributor, agent, and retailer. It needed tracing process in every phase of distribution.

But Chairman of KPPU, Ukay Karyadi told, KPPU recommended not only palm cooking oil should be monitored but also the palm oil producers. “It could be said, the water springs is brown, we need to clean up the estuary,” he said in online journalist forum which KPPU did by the late of May 2022.

He also mentioned, KPPU needs to conduct audit in the upstream sector, which is the plantation. Until now there are about 70s palm cooking oil producers. But to be more focused, there are only 8 (eight) big groups.

The big groups mostly have their own plantations and master the upstream to downstream sectors (in palm cooking oil industries). “That is why KPPU does welcome what the government would do to improve palm cooking oil industries in the upstream sector,” he said.

Director of Economy KPPU, Mulyawan Ranamenggala told that palm cooking oil before crude palm oil (CPO) and its derivative export ban implemented, CPO price was stable.

But after the government revoked the export ban, bulk palm cooking oil got cheaper. The packaged palm cooking oil gets more expensive. “Though the market price of bulk palm cooking oil is not the same with the highest retail price (HRP) as what the government regulates,” he said.

Bulk and packaged palm cooking oil get more gap after the export ban revoked. That is why Mulyawan continued, KPPU would always monitor the price after the government revoked the subsidy of bulk palm cooking oil by the late of May 2022.

According to what head of regions of KPPU found, they came to a conclusion, bulk palm cooking oil in many regions gets cheaper after CPO export ban was revoked.

Source: InfoSAWIT, June 2022