4 Big Palm Cooking Oil Companies Master 40% Markets

4 Big Palm Cooking Oil Companies Master 40% Markets

InfoSAWIT, JAKARTA – By the late of 2021 palm cooking oil was difficult to get and buy and it was very expensive in Indonesia. This was the bad news for Indonesia is the biggest crude palm oil (CPO) producer and exporter in the world. Indonesia has no sovereignty to fulfill CPO needs in the domestic as the material to produce palm cooking oil. Some thought, the country failed to monitor (by conducting bazar) to make sure that palm cooking oil was available and in economic price.

One crucial issue that came up in palm oil is that the assumption to natural resource mastery which is dealt with some big ‘players’. According to Concentration Ratio (CR) data that Komisi Pengawas Persaingan Usaha (KPPU) gathered in 2019, about 40% palm cooking oil markets were mastered by plantation, CPO and derivative product mill companies, including palm cooking oil.

As in the official statement from civil organizations, such as, Sawit Watch, ELSAM, HuMa, PILNET, Greenpeace Indonesia, the big four producers (companies) are Wilmar International Ltd, Indofood Agri Resources Ltd, Grup Musim Mas, and Royal Golden Eagle International (RGEI).

“Such market structure like it does put palm cooking oil industries in Indonesia as monopolistic category that leads to oligopoly. This impacts to the people as the end user and they get loss,” the civil organizations told, as in the official statement to InfoSAWIT, Thursday (24/3/2022)

Besides, palm oil biodiesel mandatory program impacts to the domestic CPO consumption. Prior CPO consumption was dominated by food industries but now it is by biodiesel industries. It even significantly increased from 5,83 million tons in 2019 to be 7,23 million tons in 2020. On the other hand, CPO consumption for food industries decreased from 9,86 million tons in 2019 to be 8,42 million tons in 2020.

“The stakeholders tend to provide CPO to biodiesel mill because the government guarantees that the mill will not be in loss. In fact, there are lots of subsidy from Palm Oil Plantation Fund Management Agency (PFMA) if reference price in the domestic is much cheaper than it in international markets. In the reverse, if CPO is sold to palm cooking oil factories, the stakeholders will not get such subsidy,” the civil organizations noted.

This showed that the Government of Indonesia fails to realize food sovereignty as part of human rights. The rare and expensive palm cooking oil showed that the Government of Indonesia fails to get democratic food politics based on fairness, social, and ecology care.

This is the failure of the government to realize the goals of the country to advance public welfare and social fairness, namely in interpreting food sovereignty as the politics of law and human rights as part of constitutional manifest of the country. Food sovereignty is the rights of every citizen on food that is built based on pillars of equity, sustainability, and democracy as mandated by sustainable development goals. The Government of Indonesia should not be defeated by market demands or companies, including by delivering incentives (subsidy) for the corporates. (T2)