MGCR Program Makes It Easy For People To Get Cheap Cooking Oil

Illustration of traders packing bulk cooking oil in a traditional market, (Photo: ANTARA)

JAKARTA - The Head of the Trade Assessment and Development Agency (BPPP) of the Ministry of Trade Kasan said, the people's bulk cooking oil program (MGCR) aims to provide bulk cooking oil to the public in accordance with the highest retail price (HET) which is set at Rp. 14,000 per liter or Rp. 15. 500 per kg.

“The government is optimizing the distribution of the allocation of bulk cooking oil for the country or domestic market obligation (DMO) at a price according to HET so that it can be accessed by people throughout Indonesia. The DMO requirement for bulk cooking oil in June 2022 is set at 300,000 tons or the equivalent of 416,000 tons of crude palm oil (CPO)," Kasan said as quoted by Antara, Friday, June 10.

Kasan continued, MGCR involves CPO producers as suppliers of cooking oil raw materials, cooking oil producers as suppliers of bulk cooking oil, logistics and retail service business actors (PUJLE), and distributors in the bulk cooking oil information system (SIMIRAH), retailers, and exporters.

The program has been regulated through the Minister of Trade Regulation (Permendag) Number 33 of 2022 concerning the Governance of the MGCR Program which came into effect on 23 May 2022.

MGCR must be followed by all CPO producers and/or exporters; refined, bleached and deodorized palm oil (RBD Palm Oil); refined, bleached and deodorized palm olein (RBD palm olein); and used cooking oil (UCO).

Kasan emphasized that producers who have participated will be given incentives to export.

"The condition is that producers who are validated to participate in the MGCR will receive three times as much export incentives for the transition period," said Kasan.

Kasan added, in the last transition period, there were 24 companies that received export approvals (PE) as incentives with a volume of 305,000 tons. As for the allocation of the balance or allotment of DMO 346,680 tons.

"This means that almost 90 percent of the transition period has been utilized by CPO producers and their derivatives," Kasan explained.

With a closed loop system, producers and PUJLE are responsible for ensuring the distribution of MGCR to consumers.

For example, if producers use the SIMIRAH application, CPO producers report shipments when CPO leaves the factory, then cooking oil producers report CPO receipts to cooking oil factories.

Cooking oil producers report their shipments to distributors and distributors report their shipments to retailers. Meanwhile, at the consumer level, MGCR can be purchased by showing an ID card of a maximum of two liters per day.

The Ministry of Trade noted that there was a 4.05 percent decline in the price of bulk cooking oil on June 6, 2022 compared to the day before the CPO export ban policy (27 April 2022) from Rp 17,300 per liter to Rp 16,600 per liter.

Meanwhile, Assistant Deputy for Cooperative Development and Reform, Ministry of Cooperatives and SMEs, Bagus Rachman said, 41 percent of outside oil palm plantations in Indonesia are managed by independent smallholders.

They need to be encouraged to be consolidated in cooperatives.

"Cooperatives can also help collect palm oil products so that standards are maintained," he explained.

Bagus explained, the commitment of the Kemenkop UKM to assist and provide training on oil palm issues.

"With assistance and training, oil palm farmers are expected to be independent considering that Indonesia is one of the largest palm oil producers in the world," said Bagus.