KPPU Denies, Ministry Of Trade Calls Cartel Not The Cause Of Soaring Cooking Oil Prices

Illustration. (photo: Doc. Antara)

JAKARTA - The Ministry of Trade (Kemendag) denies the scarcity and increase in cooking oil due to the cartel game. The government believes that the skyrocketing cooking oil prices are due to the impact of the COVID-19 pandemic that has hit the world.

The statement made by the Director General of Domestic Trade at the Ministry of Trade, Oke Nurwan, contradicts the findings of the Business Competition Supervisory Commission (KPPU). KPPU found that four large companies controlled 45.6 percent of the cooking oil market. The results of this study become a strong reason for the alleged unfair business competition.

Oke explained, the cause of the increase in cooking oil prices was the impact of the COVID-19 pandemic which disrupted world supply chains. Where demand is increasing, while supply is limited, prices have skyrocketed since the end of last year.

"So what has not happened so far, because this pandemic is happening is an anomaly. What's the anomaly? The high price was due to high world needs. The world's vegetable oil supply is short, there are various reasons for the disruption of the vegetable oil harvest in Canada, " he said in an Indef virtual discussion, Thursday, February 3.

Furthermore, Oke also said that Malaysia as a country which is also the largest supplier of crude palm oil or CPO is experiencing production problems. Where, the decline in production occurred due to weather factors and some of the workers returned to the country.

"In Malaysia, which he claims, has only decreased by 6 percent, but in fact it has decreased by 12 percent and it turns out that one of the reasons for the decline in world supply from Malaysia is because of the pandemic, one of which is the return of workers to Indonesia, apart from the rainy season, of course," he explained.

Meanwhile, Oke said, not all of the domestically produced CPO was used for cooking oil. According to him, the palm oil industry has at least 120 derivative products produced from processed palm oil.

Furthermore, Oke said, not to mention the need for exports, where demand and prices are currently high. So it needs a proportional arrangement of the actress can still run optimally.

In addition, Oke said that the palm oil industry in Indonesia has existed for hundreds of years. Therefore, according to him, it is impossible for a cartel game to cause an increase in cooking oil prices and cause a shortage.

Oke also questioned why the allegation of the existence of a new oligopoly was raised at this time. Meanwhile, the palm oil industry has been doing well for hundreds of years.

"How come it has only been detected now that there is unhealthy competition, oligopoly? It should have happened a long time ago, even though the KPPU has not yet been formed, the palm oil (industry) has started. Only because the price of cooking oil has gone up high, it seems as if from upstream to downstream it must be addressed. We will overhaul the international order that was built by Indonesia, I don't think so," he said.

Even so, Oke emphasized that the government strongly supports a healthy trade climate and does not want unfair business competition to occur in the country. The problem of cooking oil is only a small part of the downstream palm oil industry.

"The government strongly supports a healthy trade climate. The government does not want unfair business competition to occur. Please, those who carry out their duties and functions to ensure a healthy trade climate business competition, we support. Please," he said.