Indonesian antitrust agency calls for control of the scale of palm oil plantations

Foreign media reported on June 1: the Indonesian antitrust agency kppu said on Tuesday that Indonesia should more strictly control how many palm oil planting parks an enterprise group can operate, so as to reduce the risk of unfair competition in the downstream edible oil industry.

Kppu has been investigating monopolistic practices in the edible oil industry. Although Indonesia is the world’s number one producer of palm oil, the tight supply of domestic edible oil and high prices have prompted the government to take measures since January, including increasing export fees, mandating domestic sales (DMO and DPO), and implementing a three-week export ban from April 28. Although the export ban was lifted from May 23, the government resumed mandatory domestic sales measures (DMO) to ensure adequate supply of palm oil and reduce the price of palm oil to idr14000 per litre. But so far, the retail price of palm oil is still higher than the target level.

Marcellina nuring, director of kppu, said that the preliminary analysis found that Indonesia’s five major commercial groups controlled a large part of the country’s palm planting areas, and the control area exceeded the scope allowed by the laws and regulations. She declined to name the groups or share details of the size of their operations.

Indonesia has a total area of 16million hectares of palm plantations, including plantations operated by small farmers, private companies and state-owned companies. A palm oil group can operate up to 100000 hectares (247105 acres) of plantations. Kppu is currently reviewing this issue and will submit the analysis results to the government.

Ukay karyadi, chairman of kppu, said that if an enterprise group is considered to have exceeded the appropriate limits, their planting licenses should be redistributed so that they do not have an excessive advantage in the upstream sector. He added that at present, the company can control larger planting areas by acquiring shares of other companies. He welcomed the government’s plan to audit palm oil companies and requested that their headquarters be moved to Indonesia.

Source: Master Boyi

Post time: Jun-09-2022