InfoSAWIT, JAKARTA – The mandatory Export Revenue (DHE) retention policy announced by President Prabowo Subianto in February 2025 presents a significant dilemma for the palm oil industry. On one hand, the regulation is believed to strengthen the national economic foundation. However, on the other, concerns are mounting that its impact will be heavily felt by small processing mills and farmers.
During a press conference at the Merdeka Palace, the President emphasized this move as a crucial strategy to maintain economic resilience. The regulation is outlined in Government Regulation (PP) No. 8 of 2025, which requires export revenues from the non-oil and gas mining, plantation, forestry, and fisheries sectors to be held for 12 months in national banks. The government estimates the policy could add up to US$80 billion to foreign exchange reserves in 2025, and potentially over US$100 billion if fully implemented for a year.
Nevertheless, this policy is a double-edged sword. The business community, especially the palm oil sector, must adapt to significant changes. Director of PT Citra Borneo Utama Tbk. (CBUT), Ronny Hertantyo Raharjo, admitted that extending the DHE retention period from three to twelve months is no small change. “Fortunately, there is flexibility. Foreign currency funds can be immediately converted to rupiah at the same bank, so working capital needs are not too disrupted,” he said during a CBUT Public Exposure in May 2025.
Ronny also compared the current situation to the past, when foreign buyers held the foreign exchange, making it difficult for companies to cover operational costs. Now, even though the foreign exchange isn't freely released, the direct conversion option provides leeway. However, he stressed that not all palm oil companies have the same ability to adapt. Thousands of small and medium-sized businesses could be under much greater pressure.
Similar concerns were voiced by the Indonesian Palm Oil Farmers Union (SPKS). SPKS National Council member, Mansuetus Darto, believes this policy will ultimately trickle down to the grassroots level. “Small-scale farmers don’t export directly. They sell their fruit to cooperatives, middlemen, or palm oil mills. But if the exporters are hit, the mills will be too. In the end, farmers could struggle with harvesting,” Darto told InfoSAWIT.
The DHE policy stands at a crossroads: balancing the need to protect national economic sovereignty with the need to provide more breathing room for businesses on the ground. What is clear is that without supportive policies, the heaviest burden could fall on the shoulders of the small-scale farmers who are the backbone of Indonesia's palm oil industry. (T2)
