Ministry Of Trade Gives Export Incentives For Producers To Fulfill Bulk Cooking Oil Distribution

Head of the Trade Assessment and Development Agency of the Ministry of Trade, Kasan. (Photo: ANTARA)

JAKARTA - The Ministry of Trade will provide export incentives for business actors, cooking oil producers, CPO producers or other derivative products if they can fulfill their obligation to distribute bulk cooking oil in the People's Bulk Cooking Oil (MGCR) program.

"So producers who are also exporters of cooking oil, they will join this program, and after fulfilling their obligation to fulfill bulk cooking oil for the people of Rp. 14,000 per liter, they can get incentives to export," said Head of the Trade Assessment and Development Agency, Kasan. quoted from Antara, Wednesday 8 June 2022.

Kasan explained, in the transition period since the lifting of the ban on exports of CPO and cooking oil, namely May 23-31 2022, producers who are also exporters can get three times the incentive or a ratio of 1:3.

After the transition period ends, or starting in June 2022, the incentive ratio will be increased by 1:5.

"This means that every time a producer can distribute bulk cooking oil to the community, he will get five times the amount to be able to apply for export approval and to export," he said.

However, Kasan emphasized that the distribution of bulk cooking oil to the people by the producer must be validated.

"This means that for business actors participating in the people's bulk cooking oil distribution program, which can then be validated, the amount has been proven, then that becomes the basis for the Ministry of Trade to issue export approvals," he said.

Kasan noted, through the existing electronic system, namely the Bulk Cooking Oil Information System (SIMIRAH) which is connected to INSW and Inatrade, until June 5, 2022, there have been 24 companies that have received export approvals with a total exportable volume of 305,000 tons.

"It's almost close to the balance or allotment for the transition period of around 346,680 tons. It's almost 90 percent, in the transition period, business actors have taken advantage of it," he said.

The Bulk Cooking Oil Program for the People (MGCR) provides the public with the domestic market obligation (DMO) allocation of bulk cooking oil at a price of IDR 14,000 per liter or IDR 15,500 per kg.

This program involves CPO producers as suppliers of cooking oil raw materials, cooking oil producers as suppliers of bulk cooking oil, retail logistics service business actors (PUJLE) and distributors in the Bulk Cooking Oil Information System (SIMIRAH), retailers, and exporters.

The program is regulated through the Minister of Trade Regulation (Permendag) Number 33 of 2022 concerning Governance of the People's Bulk Cooking Oil Program (MGCR) to optimize the distribution of bulk cooking oil, effective on 23 May 2022.

This Minister of Trade Regulation regulates the obligations of all crude palm oil (CPO) producers and/or exporters of CPO, refined, bleached and deodorized palm oil (RBD Palm Oil); refined, bleached and deodorized palm olein (RBD palm olein), and used cooking oil (UCO) to participate in the MGCR program.

Meanwhile, producers who do not participate are prohibited from exporting these products.

The government is committed to re-activating exports of CPO and its derivative products in order to increase the price of fresh fruit bunches (FFB) at the farmer level as well as boost export performance.