The Fallen of Palm Oil Farmers

The controversy over the high cost of cooking oil, whose price increases  have been visible since April 2021, is still not over. In early 2021, the  average price in traditional markets is around 13,000 IDR per liter, and in  modern markets, 15,000 IDR per liter. Since April 2021, this figure has  increased to approximately 14,000 IDR and 16,000 IDR per liter in  October 2021. The price of cooking oil then continued to soar until the  one-price policy on January 19, 2022, approached the range of 18,000  IDR and 19,000 IDR per liter.

After the policy of the highest retail price (HRP), the cost of cooking oil  officially fell, especially in the modern market, to around 14,000 IDR per  liter. However, the availability of cooking oil in the market decreased  drastically and even disappeared. Long queues of people to get cooking  oil became a familiar sight until the government finally revoked the HRP  policy for packaged cooking oil on March 16, 2022.

The availability of cooking oil soon recovered but with prices soaring to  touch 22,000 IDR per liter. The government then took drastic steps by  banning the export of crude palm oil (CPO) and its derivatives starting  April 28, 2022. The government lifted this export ban on May 23, 2022,  even though prices are still high, especially in the modern market.

A tragedy occurred in this chaotic high price of cooking oil: the fall in the  price of smallholder (petani rakyat) palm oil. Before the ban on CPO  exports, the price trend of palm Fresh Fruit Bunches (TBS) was to  increase and reach its best price in March 2022, running in the range of  4,000 IDR per kg, in line with international CPO prices, which peaked at  around US$ 1,800 per ton. After the CPO export ban on April 28, 2022, TBS  prices immediately fell. After lifting the CPO export ban on May 23, 2022,  the fall in TBS prices did not end. CPO exports cannot be recovered  quickly. At the same time, international CPO prices have decreased, with  the deepest point falling in the range of US$ 1,000 per ton in July 2022.