JAKARTA - President Joko Widodo has officially issued a policy to ban exports of crude palm oil (CPO) and cooking oil products which will take effect on Thursday, April 28.
Responding to this, Economic Observer and Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira revealed that domestic production of crude palm oil has greatly met the consumption of the Indonesian people without having to stop exports abroad.
"Actually, if it is only fulfilling domestic needs, there is no need to stop exports. This is a policy that repeats the mistake of stopping suddenly exports of coal commodities in January 2022. Is the problem solved? It's not actually protested by potential buyers abroad. stopped," he told VOI, Saturday, April 23.
He considered that the export ban would actually benefit neighboring countries such as Malaysia as a competitor for Indonesian CPO as well as other countries that produce alternative vegetable oils such as soybean oil and sunflower oil.
"What should be done is enough to re-implement the 20 percent CPO DMO policy," added Bhima.
According to him, when implementing the DMO policy some time ago, the problem was regarding the compliance of entrepreneurs in fulfilling their DMO obligations which then led to a gratification scandal, while the supply of 20 percent of total CPO exports for domestic needs was more than sufficient.
"Once again, it is not appropriate for a total export ban to be carried out. So far, the problem has been on the side of producers and distributors whose supervision is weak," added Bhima.
He added that the export ban policy will not necessarily bring down the price of cooking oil if it is not accompanied by the Highest Retail Price (HET) policy on packaged cooking oil.
Furthermore, he said, during the month of March 2022, Indonesia's CPO exports brought in a profit of 3 billion US dollars.
"So the estimate is in May if the assumption is that the export ban is valid for a full month, a foreign exchange loss of 3 billion USD will occur and that figure is equivalent to 12 percent of total non-oil and gas exports," he added.
This decision, he continued, could destroy the stability of the rupiah, which has been well maintained so far. For this reason, he asked President Joko Widodo to reconsider the decision to ban exports of crude palm oil abroad.
"Please, Mr. Jokowi, rethink this policy that is not a solution. Mr. Jokowi's whisperer should also not just give misleading policy advice," concluded Bhima.
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