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Palm oil farmers trade with Malaysia to survive dire situation, says Apkasindo

Tempo - July 5, 2022

Riani Sanusi Putri, Jakarta – The Indonesian Palm Oil Association (Apkasindo) chairperson Gulat Manurung on Monday responded to an issue that had gone viral on the internet where Indonesian palm oil farmers sold their palm fresh fruit bunches (FFB) across the border to Malaysia as prices in Indonesia had drastically fallen.

"It is true that the prices of FFB are still at the bottom, and continues to dwindle every passing day. This has caused panic among farmers from Aceh to Papua," said Manurung to Tempo on July 4.

According to his testimony, palm factories in Indonesia – identified with the term PKS – are only valuing FFB not more than Rp1,000 per kilogram. This is a stark contrast to the country the farmers are selling their crop to that values palm oil FFB between Rp3,500-Rp4,500 per kilogram.

"Farmers who are based along the border with Malaysia can still salvage their produce by selling it [to Malaysia] that values the commodity up to Rp4,500 per kilogram. Meanwhile in Indonesia, selling for Rp1,000 is difficult," he added.

Many farmers are desperate to violate the export regulations because of their family's economic problems, he explained. Even though it violates current export rules, this method is better than farmers continuing to lose money and committing crimes to cover their economic needs, Manurung argued.

The Minister of Trade Zulkifli Hasan acknowledged this situation and deemed it understandable. "If the Trade Minister considers this practice acceptable, I would agree with him. This is the farmers' livelihood we are talking about," the Apkasindo chairman said.

Source: https://en.tempo.co/read/1608786/palm-oil-farmers-trade-with-malaysia-to-survive-dire-situation-says-apkasind