Government Needs To Improve Cooking Oil Trade Governance

ILLUSTRATION BETWEEN

JAKARTA - Head of Yogyakarta Stiper Agricultural Institute (Kainstiper) Alumni Priyanto PS said the government needs to improve the governance of the national cooking oil trade, so that it is not only able to meet domestic needs but also the world.

"The Indonesian government must improve the governance of the national cooking oil trade, where the market logistics network needed by the community must be improved and managed better. The goal is that the supply of cooking oil can be evenly distributed and can be easily accessed by the wider community at affordable prices," said Priyanto through written statement quoted by Antara, Saturday, May 14.

According to him, the existence of crude palm oil (CPO) and its derivatives, including cooking oil, plays an important role in meeting the world's needs for edible oil, so it must be regulated more strictly with the main priority being to fulfill domestic needs.

Logistics infrastructure, which is still chaotic, he continued, could be facilitated by the Government of Indonesia, through the logistics network of Bulog and BUMN, to ensure the supply of bulk cooking oil for people in need.

He said the involvement of state-owned plantation companies (PTPN) that manage palm oil must serve to provide the main supply for the national CPO needs.

The government, according to him, must immediately build an integrated palm oil industry from upstream to downstream in order to better manage the fulfillment of domestic needs. Thus, if there is a shortage of domestic supply, the government can give special assignments to SOEs to provide community needs as its main priority.

Priyanto PS explained that the price of CPO which is creeping up in the global market has caused a lot of distortions in oil palm plantations, such as the increase in production facilities and infrastructure, including fuel which also increases the cost of CPO production.

As a result, according to him, the windfall profit must also continue to pay for fertilizer, fuel, and other production facilities at high prices, including buying farmers' fresh fruit bunches/FFB at a higher price according to global CPO prices.

"So, not all of the windfall profits obtained from the increase in the selling price of CPO, will only be enjoyed by oil palm plantation companies, but will be distributed along the CPO production chain," he explained.

Priyanto assesses the importance of understanding the CPO business network in order to find out the various obstacles in fulfilling the supply of cooking oil to the wider community.

The market logistics network from cooking oil factories, distributors, large agents, small agents to small stalls and Micro, Small & Medium Enterprises (MSMEs), he said, must be recorded and their needs met.

"With the installed capacity of cooking oil factories and large CPO factories, domestic cooking oil needs can certainly be met. The main problems are market demand data, trade mechanisms and affordable domestic selling prices, the government must immediately address," said Priyanto PS.