Commission VII DPR Asks For CPO Prices Not To Be Released To Market Mechanisms

A number of trucks carrying palm oil fresh fruit (FFB) signs line up for unloading at a palm oil mill in West Aceh. (Photo: ANTARA)

JAKARTA - Chairman of Commission VII of the House of Representatives Sugeng Suparwoto asked that the regulation of crude palm oil (CPO) prices should not be released to the market mechanism.

According to Sugeng, the presence of the state is still important to regulate the availability of these commodities in the country.

"State interference is justified in regulating it, because it involves the livelihood of many people," said Sugeng as quoted by Antara, Wednesday, May 25.

He said, between domestic and export needs must be balanced.

This is because the product derived from palm oil is cooking oil which has become the livelihood of many people in the country.

Sugeng believes that cooking oil has now become a national strategic industry, because one of the causes of domestic economic inflation is the availability and price of cooking oil.

Thus, he continued, the state needs to regulate its domestic market obligation (DMO) and domestic price obligation (DPO) regarding CPO.

"For example, CPO production per year is 57 million tons, then how much DMO is applied. For example, 20 percent. That is, one-fifth of CPO for domestic purposes with prices pegged based on DPO. This is to avoid fluctuations in domestic availability," said the Nasdem Party politician.

Sugeng reminded that the national economy in Indonesia does not adhere to liberalism, so it cannot be left to the free market mechanism.